(Bloomberg) -- Longfin Corp., a fintech company whose stock skyrocketed 2,600 percent after it touted ties to cryptocurrencies, will be booted from the Russell 2000 Index less than two weeks after joining.
The New York-based firm failed to meet a rule that required it to have at least 5 percent of its shares available to the public, FTSE Russell said in a statement Monday. The stock is set to be removed from the Russell 200 Index, the Russell Global Index and the Russell Developed Index after the market closes on March 28.
Longfin shares plunged as much as 35 percent to $38.26, after slumping 17 percent Monday. The stock has still returned almost 700 percent since the company went public in December.
Longfin announced less than a week ago that it had been added to the Russell indexes following its recent initial public offering and enormous stock surge. The shares soared in December after the firm said it bought Ziddu.com, “a blockchain-empowered global micro-lending solutions provider” that transacts in “Ziddu Coins.”
Skeptics piled in after Chief Executive Officer Venkat Meenavalli got into a heated debate with news anchors during a December CNBC interview. The CEO said at the time that the firm’s surging market value was “insane” and “not justified.”
“We don’t see any fraud,” said Lijie Zhu of Dragon Gate Investment Partners, Longfin’s investor-relations firm, in a phone call Monday.
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