One portfolio manager says that confusion may have been behind a Thursday rally of Bluesky Digital Assets Corp. shares, which later fell Friday.
Bluesky shares were trading around 40 per cent lower Friday afternoon at around $0.42. The decline followed a Thursday rally that saw the stock trading over 140 per cent higher during afternoon trading, rising to just under $0.65.
Nick Mersch, portfolio manager at Purpose Investments, said in a statement to BNNBloomberg.ca Friday that the “recent surge” in the company’s share price “may be driven by name confusion.”
“The company has stated that there’s been no material change affecting its stock, which suggests the spike isn’t tied to any fundamental developments,” he said.
In a press release Thursday, the company said that at the request of the Canadian Investment Regulatory Organization (CIRO), it “wishes to confirm that the Corporation’s management is unaware of any material change in the Corporation’s operations that would account for the recent increase in market activity.”
The Toronto-based company trades under the symbol BTC:CF on the Canadian Securities Exchange, similar to the symbol for Bitcoin, though the reason for the rally and subsequent decline remains unclear. It also shares a name with Bluesky, the social media platform, which according to Bloomberg News was started in late 2019 by Jack Dorsey, Twitter’s CEO at the time.
“Currently, there’s significant attention on BlueSky, a social media platform co-founded by Jack Dorsey that’s completely unrelated to Bluesky Digital Assets, as X users are defecting there in droves after discontent in the Musk/Trump election news cycle,” Mersch said.
He added similar instances have happened before.
“This type of confusion has been seen before, such as with the stock movements of Zoom Video Communications (ZM) versus a completely different company with the ticker ZOOM,” he said.
“Given the growing interest in BlueSky as an alternative to centralized platforms, it’s possible that investors may be confusing the two, driving up the share price of Bluesky Digital Assets.”
The price of Bitcoin has gained following Donald Trump’s victory in the U.S. presidential election, with Bloomberg News reporting Wednesday that the price of the digital currency briefly rose above US$93,000 for a short period amid further expectations of interest rate cuts by the U.S. Federal Reserve.
According to the release, Bluesky operates a web platform that offers support for businesses to adopt and utilize emerging technologies like blockchain, artificial intelligence and Web3 business solutions.
Bluesky, the social media platform, has around 15 million users, adding more than 1.25 million new users since the Nov. 5 U.S. election, reported Bloomberg News. In September, the platform had about 10 million users. Additionally, one week after the U.S. election it was ranked as the top free app in Apple’s App Store.
On Monday, Bloomberg News reported that rival social media networks to Elon Musk’s X, including Threads and Bluesky, have seen a growth in new users post U.S. election.