TechFlow news, on August 28, according to Fortune, so far this year 184 publicly listed companies have announced purchases of cryptocurrencies totaling nearly $132 billion. However, research has found that some small-cap public companies experienced suspicious stock price movements prior to announcing their cryptocurrency reserve plans.
The report pointed out that SharpLink's stock price had been hovering below $3 in April and early May. But when it announced on May 27 its plan to acquire $425 million worth of Ethereum as a reserve asset, its share price surged to nearly $36. Yet, three trading days before the announcement, SharpLink's stock had already doubled from $3 to $6, despite the company not having filed any documents with the SEC or issued a press release. Several other companies also saw unusual stock price fluctuations before announcing cryptocurrency purchases—Mill City Ventures, MEI Pharma, Kindly MD, Empery Digital, Fundamental Global, and 180 Life Sciences Corp.
Peter Cziraki, a finance professor at Texas A&M University, said this pattern resembles insider trading seen in traditional merger and acquisition deals. To address the risk of information leakage, some companies, such as CEA Industries, have adopted new measures by disclosing stock ticker symbols to investors only after market close, reducing the likelihood of premature leaks.
