With hardly a year of operations under its belt and scant results to show for it, UBI Blockchain Internet is riding buzzwords to a stock boom.
It’s become one of the most valuable publicly traded companies in the bitcoin universe — second only to LongFin Corp. The stock surged almost 1,000 percent this year, valuing UBI Blockchain at $1.2 billion. Now, the Hong Kong-based company has registered to sell an additional 72.3 million shares owned by executives including Chief Executive Officer Tony Liu, regulatory filings show.
But persuading would-be shareholders to wager on an untested business model could prove challenging for a company with 18 employees, no revenue and whose regulatory filings list a disconnected phone number. The volatility of bitcoin , considered a proxy for companies that rely on blockchain technology, isn’t helping either.
“The profile of this company is scary,” says Charles Lee , a professor of management and accounting at Stanford University. “Blockchain is right at the apex of saliency right now. But you have this problem because it’s hard to verify anything — the technology, the fact that it’s in China. You certainly don’t want to own this stock.”
Blockchain is a big, universally accessible database that keeps a digital record of transactions. UBI Blockchain says in filings with the U.S. Securities and Exchange Commission that it wants to harness this capability “to trace a food or drug product from its original source within the context of the Internet of Things to the final consumer.” T.J. Jesky, UBI’s attorney at law firm Jesky Law, explains that “UBI Blockchain is in the process of building technology to trace pharma products made in China from manufacturer to the end user. The idea is to prevent counterfeit products.”