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Sinking Greenidge Generation Stock Makes No Sense After Support.com Tie-Up

There is now no reason to be invested in Greenidge Generation (NASDAQ:GREE) stock following its merger with Support.com on Sept. 15. In the short time since that merger, GREE stock hasn’t done anything but drop.

Concept art of crypto mining with little figuring and a Bitcoin (BTC) token.
Source: Shutterstock

Greenidge Generation is a cryptocurrency miner. Support.com provided tech and customer support. To many, myself included, this tie-up posed a difficult-to-answer question of why? I wasn’t sure if the merger aimed at building some sort of nascent platform targeting tech support and crypto-mining. I’m still not sure what the purpose of the merger was or what it attempted to achieve.

But one thing is clear: The market didn’t appreciate the move. Share prices have steadily declined from $43 to $24 in the interim. There’s not much investors can glean from the combination and even less to suggest a potential turnaround. Clearly, this is no buy-the-dip situation.

Perhaps the only good news to come out of the merger is that GREE shareholders made out handsomely in the run-up to the merger.

GREE Stock Ruined by Flawed Idea

Greenidge Generation shares had risen steadily year-to-date. They began 2021 trading under $20 per share. They were up to $70 when the merger was voted on and agreed upon in August. And GREE stock even briefly spiked above $300 a share at the end of that month.

But the bottom dropped out as the merger approached. It’s hard to say why it happened other than that sentiment never looked positive in the first place. It just seemed flawed from the get go.

The last time I wrote about Support.com, I was baffled as to why it should merge with Greenidge Generation.

In June, Support.com issued a press release to explain its motives, stating: “new service offerings {would} bring reliable and 24/7 on-demand customer support to emerging fintech leaders, cryptocurrency and NFT platforms, exchanges, and wallet OEMs.”

It didn’t make any sense then, and it still doesn’t. Maybe that’s why the press release was removed from the company’s website, though not before the Internet Archive preserved it.

Some investors made a lot of money while others toughed it out on vague promises.

The silver lining is that investors can learn something from the language in that archived press release above. Vague promises predicated on hot topics including NFTs, cryptocurrency and a fintech renaissance should arouse suspicion.

That isn’t an indictment of any of those respective sectors. On the contrary, there are many truly revolutionary projects coming out of those respective spaces. But Greenidge never looked like it was going to be one of them.

The inauspicious start leaves optimistic investors searching for positive catalysts though.

Carbon Neutrality

Greenidge Generation is attempting to market its business model now by leveraging more buzz-worthy topics. This time, according to my colleague Josh Enomoto, the buzz revolves around carbon neutrality in its crypto mining practices.

Greenidge CEO Jeff Kirt wants his firm to catch on as a 100% carbon neutral miner. Whether Kirt’s assertions are true is irrelevant. As Mr. Enomoto points out, crypto mining operations are moving toward jurisdictions with cheap electricity and lax environmental regulations. It’s profitability investors seek from firms seek in the sector, not carbon neutrality.

Carbon neutrality might garner some interest in Greenidge , but it is increasingly unlikely that it drives the bottom line.

What to Do Now

It’s very obvious that I believe there is little about GREE stock that makes it investment worthy. It serves as a cautionary tale of chasing buzzwords and half-baked merger ideas.

There is no reason to jump in now, and there was really never one to begin with.

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.

Article printed from InvestorPlace Media, https://investorplace.com/2021/09/sinking-greenidge-generation-stock-makes-no-sense-after-support-com-tie-up/.

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