Riot Blockchain Stock Earns First 'Buy' Rating

The blockchain stock is trading higher in pre-market action

Riot Blockchain Inc (NASDAQ:RIOT) grabbed headlines late last year, as the former biotechnology firm was one of a handful of companies to suddenly transition its business to focus on blockchain. RIOT shares rose from below $5 in September to as high as $46.20 by Dec. 19. However, these gains quickly evaporated, with the equity crashing in 2018 to a current price of $7.23.

Despite this extreme price action, or maybe because of it, not one brokerage firm had initiated coverage on the stock. That changed this morning, when H.C. Wainwright announced a "buy" rating and $9 price target -- pricing in upside of almost 25%. The bullish attention has the security trading up 1% before the opening bell.

If nothing else, this may help allay some fears surrounding Riot Blockchain. The shares fell sharply back in February -- around the time the company bought Logical Brokerage -- on a CNBC report questioning how CEO John O'Rourke sold stock during the late-2017 surge. More recently, the company was subpoenaed by the Securities and Exchange Commission (SEC), and the extended slide in the price of Bitcoin (BTC) certainly hasn't helped, either.

Looking closer at the charts, RIOT bottomed just above $6 back in March, and is now battling the 50-day moving average. It's also worth noting that yesterday's close put Riot Blockchain's valuation just below the $100 million mark, a potentially significant level. The stock still has to deal with increased attention from short sellers, however, as these bears now control over 40% of the float after a 12.3% increase in the last two reporting periods.