Less than a week after InvestorPlace profiled Longfin Corp (NASDAQ:LFIN) as a blockchain bubble stock, LFIN stock has exploded, dropped back and is heading to the stratosphere again.

Our Karl Utermohlen wrote on Dec. 15 that the stock was skyrocketing on news it would buy Ziddu, which it said provides a cryptocurrency called “Ziddu Coins” as part of its blockchain-based micro-lending facility.

Ziddu’s own web site says only that it is “a Blockchain research company developing” the facility in question, but that did not stop people from sending LFIN stock’s market cap to $3.6 billion in a matter of days after its Initial Public Offering.

Two of the big winners here turn out to be former Bollywood actor Amitabh Bachchan and his son Abhishek, also an actor-producer.

Here’s how it all happened.

LFIN Stock in the Spotlight

The Bachchans started their rise in 2015 by putting $250,000 into Meridian Tech Pte, then a start-up in Singapore involved in cloud storage and distribution launched by Venkat Meenavalli, who they might have met at the ATA Enclave, in Mumbai, in May of that year. His holding company at the time was called Stampede Capital.

Indian reporters who covered Meenavalli’s 2015 talk, and the Bachchans’ initial investment, described Ziddu in 2015 as paying users for uploading files and getting revenues from advertisements. Soon after the Bachchans made their initial investment, the site’s traffic dropped by almost 90%. At the time, parent Stampede Capital was being called a “dubious market cap” by the Indian financial press while Meenavalli was comparing it with Virtu Capital, a market-making firm for active traders.

Ziddu is Meenavalli’s current operating company, but it’s not yet operating. Longfin and Ziddu are affiliate companies, and according to SEC filings Longfin bought Ziddu for 2.5 million shares of its stock Dec. 11.  The company has a total of 52.5 million shares.

This did not stop LFIN from going public at about $5-per-share on Dec. 14, which would be a market cap of $260 billion. The same day it rang the closing bell at the NASDAQ market site; LFIN stock peaked at over $125-per-share on Dec. 18 and it has since “settled down” at about $70-per-share.

But this remains a development company and its press releases contain a collection of buzzwords like “calculating the incalculable”. The SEC has no financial information on Longfin. Its 8K promises that within a few months.

What It Would Be

From a technical perspective, Ziddu reads like a lot of companies that have gone public through Initial Coin Offerings in 2017. That is, instead of taking cash through a public or private offering, they took cryptocoins like Bitcoin or Ethereum, the assumption being they would cash in those coins as they developed their systems.

Microlending has long been common on the Indian subcontinent. Muhammad Yunus won the Nobel Peace Prize in 2006 for his microlending facility, Grameen Bank.

In theory, running such a bank on a blockchain could reduce costs and automate trust, but the major costs of microlending aren’t on the back-end, where Ziddu proposes to work, but on the front-end, in finding and onboarding customers through agents. Grameen has over 24,000 employees doing this work.

Bottom Line on LFIN

Meenavalli is quoted in Utermohlen’s article as saying that Blockchain “has caught the imagination of the global financial services industry.”

This seems to be a telling phrase. Most of what Ziddu is doing is currently imaginary. Meenavalli has a history of doing this, with Stampede Capital, but his latest score has, at least for now, made both him and the Bachchans very wealthy men. 

Dana Blankenhorn is a financial and technology journalist. He is the author of the historical mystery romance The Reluctant Detective Travels in Time, available now at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned no shares in companies mentioned in this story.