Why Is Sphere 3D (ANY) Stock Up Today?

Sphere 3D (NASDAQ:ANY) stock is up 13% today after the cryptocurrency mining firm called off a planned merger.

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

Investors are reacting positively after Sphere 3D called off its planned merger with privately held Gryphon Digital Mining.

The companies had been planning to form a single carbon-neutral cryptocurrency mining firm.

What Happened With ANY Stock

In a news release, Sphere 3D said it now plans to continue operating as an independent cryptocurrency miner and will no longer pursue the merger with Gryphon Digital.

The companies did say that, going forward, they will continue to work on a limited number of “strategic initiatives” that include the management of Sphere 3D’s crypto mining fleet.

The two companies cited “changing market conditions” as the reason they are calling off their merger. ANY stock initially fell more than 25% in after-hours trading on news that the merger has been cancelled. However, the stock now seems to be recovering and is trading above its closing price yesterday of $2.17.

In the past six months, ANY stock has declined 60%, including a 20% pullback so far in 2022.

Why It Matters

Based in Toronto, Sphere 3D is a comparatively small cryptocurrency miner. Merging with Gryphon Digital was seen as a potential growth catalyst for the company.

At the same time, cryptocurrency miners around the world are racing to make their operations more energy efficient and environmentally friendly. The big knock on crypto mining is that it uses an excessive amount of energy and is bad for the environment.

That the merger with Gryphon Digital could have helped create a carbon-neutral mining firm had attracted attention from both investors and cryptocurrency observers.

Now that the planned merger has been called off, it is not immediately clear what Sphere 3D will do next. The company did announce a change in leadership, stating that Patricia Trompeter will now assume the CEO role while previous CEO Duncan McEwan moves to become chairman of the board of directors. Sphere 3D also says that its mining fleet continues to grow.

What’s Next for Sphere 3D

ANY shares trade at penny stock levels and are volatile at the best of times. News that the merger with Gryphon Digital has been scuttled seems to have added to that volatility. As mentioned, Sphere 3D’s stock initially fell 25% on this news but have since rebounded to trade up 13%. Investors should expect continued volatility in the days ahead and proceed with caution.

On the date of publication, Joel Baglole 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.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.


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