GREE Stock Is Falling Despite Expansion News. Here’s What to Know.

Today began with what should have been very good news for shareholders in Greenidge Generation (NASDAQ:GREE). After a well-publicized and lengthy process, the closing of its merger with finally allowed the alternative energy producer to begin trading in September 2021. After a strong debut, GREE stock has struggled, but investors remained optimistic due to the company’s expansion efforts. Today brought confirmation that Greenidge would indeed be expanding, but shares have reacted with extreme volatility.

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

Source: Shutterstock

What’s Happening With GREE Stock

This morning brought the release of Greenidge’s comprehensive expansion plans to extend its reach to both North Carolina and Texas. For a company heavily invested in mining Bitcoin (CCC:BTC-USD), this is an opportune time to expand operations, as Wall Street now has as two Bitcoin exchange-traded funds and is about to see the launch of several more. This development sent the cryptocurrency to its all-time high.

GREE stock initially reacted well, before taking a turn down. Shares have so far hit intraday highs of $21.88 and intraday lows of $20.12. As of this writing, the stock is currently down 3% for the day.

Of course, Greenidge is no stranger to market turbulence. GREE stock has spent the past week fluctuating, falling by more than 15% yesterday. Collectively, shares are down more than 30% for the past month.

What It Means

It’s not hard to see why expectations would have been high for a stock like GREE to finally gain momentum following the confirmation of some significant expansion efforts. As today has taught us, though, external factors that can be difficult to see coming can serve to influence a stock’s performance even in the face of good news. Let’s take a look at what’s at play for Greenidge.

Despite its recent record-setting spike, Bitcoin has been falling since yesterday. It’s currently down 4% for the day and Ethereum (CCC:ETH-USD) is down by 3%. We all know that when Bitcoin moves, its peers tend to follow. While Greenidge’s expansion efforts are certainly promising, it may be too late for the company to ride the first Bitcoin ETF wave.

These major expansion plans also raise the question of how Greenidge will cover associated costs in the short term. The purchase of a 175-acre site in Spartanburg, South Carolina could certainly increase profits down the road, but the company’s statement doesn’t offer much detail as to how it will foot the bill. Companies in such situations have resorted to issuing more shares, resulting in current shareholders being diluted. This type of news raises plenty of questions, and when there are no clear answers, investors can become uneasy.

Why It Matters

All this isn’t to say that Greenidge should be written off. The company still has plenty of upside potential. Less than one month ago, one analyst issued a $78 price target for GREE stock, citing the potential he saw due to its rapid growth and potential to scale.

More recently, InvestorPlace’s Joseph Nograles flagged Greenidge as an interesting Bitcoin play, noting that it was spending less than its rivals Riot Blockchain (NASDAQ:RIOT) and Marathon Digital Holdings (NASDAQ:MARA).

Despite all the turbulence, GREE remains a stock worth watching. With the long-awaited expansion efforts finally approaching, the company may be poised to finally gain the momentum it needs.

On the date of publication, Samuel O’Brient 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 Publishing Guidelines.

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