Support.com (NASDAQ:SPRT) is soaring nearly 300% this morning on news that has nothing to do with its customer service business. In fact, it seems that SPRT stock is surging on news of a merger with a cryptocurrency mining company, Greenidge Generation Holdings.
So what do you need to know now?
To start, Support.com is a player in the customer service market. It bills itself as the leader in homesourcing — a practice in which companies transition their employees to working from home. More specifically, it says it provides businesses with home-based customer service solutions and proprietary, cloud-based platform. Greenidge Generation Holdings runs a Bitcoin (CCC:BTC) mining and power generation business in New York. According to a new press release, these two outfits are about to merge.
Essentially, Greenidge Generation will merge with Support.com to start trading on the Nasdaq Exchange. According to the press release, this will make it the first publicly traded crypto mining company that has its own wholly owned power plant. Support.com will stick around as a subsidiary of Greenidge Generation.
What else should investors know about the deal and SPRT stock right now?
There are a few other key details about the merger that stick out. The first is that Support.com says the deal should close, pending shareholder approval, in the third quarter. After the merger, Support.com shareholders will own about 8% of the combined company. Greenidge Generation shareholders will account for the other 92%. Because Support.com plans to give Greenidge Generation $33 million in additional cash, the combined company would have $70 million in net cash.
Perhaps most importantly, Support.com says this merger comes at a time when Greenidge, and the broader mining business, is growing.
SPRT Stock and the Greenidge Crypto Merger
So what is this deal all about? And what does it mean for SPRT stock?
As Support.com tells it, this deal will provide value for shareholders by exposing them to a rapidly growing business. For Greenidge, it is all about increased visibility and access to the Nasdaq. Greenidge says its mining capacity continues to grow. It expects to have 500 megawatts of mining capacity by 2025, compared to just 19 today. Additionally, the mining company says its power generation business gives it a competitive edge. This is because it does not have to rely on third-party sources for power.
There is no doubt that customer service and Bitcoin mining make an odd marriage, and this merger merits scrutiny on that fact alone. However, as of Monday morning, it appears investors are excited about SPRT stock. Shares are up 277% at the time of writing.
Just be sure to be cautious and to do your own research.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.
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