When we last checked in on Net Element Inc. (NASDAQ:NETE), the company had just announced its deal with the blockchain and cryptocurrency company Bunker Capital. Bunker Capital was going to develop a blockchain technology for Net Element to use to connect consumer directly to merchants, creating a decentralized crypto-based ecosystem and increasing the speed and efficiency of transactions. The news resulted in a 300% climb in Net Element’s stock, a prime example of a company benefiting from the blockchain hype.
Where is Net Element now, two weeks after its blockchain announcement? Unlike some other companies that made similar blockchain-infused promises, Net Element is actually following through. Today, the company announced that it had just completed a $7.55 million private placement of restricted common stock and warrants. The private placement was funded through a New York-based family office that invests in companies with blockchain technology platforms – which Net Element is going to be.
Net Element intends to use the money earned through the private placement to continue its strides towards fully integrating blockchain into its structure. The money will also be used to help with growth initiatives and will allow for potential acquisitions to be made by the company.
Net Element’s CEO, Oleg Firer, commented that Net Element’s “balance sheet is now the strongest in its history,” as a result of its recent dealings and this is showing in the company’s stock.
As a result of Net Element’s recent successes, along with its continuation in its commitment to integrating blockchain technology into the company’s platform, Net Element’s stock has risen by 25%. At the time of writing, the company stock is trading at $13.86, putting it up $2.73, or 24.56%, from the previous close of $11.13. While this does mean that its stock has lowered since its first blockchain announcement (which had sent Net Element’s stock soaring to as high as $24.98 on the day of the initial announcement), it is still more than double what it was before the company announced any intentions of becoming involved with blockchain (the day before its first blockchain-related announcement, Net Element closed at a price of $5.21).
I believe that the company is in a strong position to continue its success on the market. Net Element made the plans to start using blockchain for its benefit, so now it is not only benefiting from a promise of blockchain, but also from the follow-through on that promise. There are several companies that simply wanted to get in on the blockchain hype without putting work into actually integrating blockchain into their platforms, so it’s nice to see one company actually follow through and even nicer to see it succeed as a result.
Featured Image: depositphotos/maxkabakov
