The crazy swings of Bitcoin prices added more than $100 million to Bollywood superstar Amitabh Bachchan’s fortunes within days, but most of it was wiped out even faster — thanks to a small stake in a hitherto unknown firm associated with the web of cryptocurrencies.
There may be more fluctuations with the craze for Bitcoins and other cryptocurrencies continuing to drive their prices and the regulatory risks remaining a big drag. Bitcoin prices skyrocketed to nearly $20,000 just a few days ago, before plunging by almost half and then again recovering to the $15,000 level.
While lakhs of Indians are said to have taken a fancy to Bitcoin and other virtual currencies, Bachchan is probably the first big name from the country to be associated with this buzzword — albeit indirectly and because of a small investment that is at least three-four years old.
The link is a Hyderabad-based company named Stampede Capital, which describes itself as a “research driven global trade house” and a “liquidity provider and market maker” at various exchanges, driving “millions of dollars trading volume everyday across the globe in nano seconds”.
In its regulatory filings, the company lists Bachchan as an “individual non-promoter shareholder” with a small stake of 2.38 per cent at the end of the last quarter.
According to the BSE records, Bachchan figures on the list of shareholders (with 1 per cent or more stake) since at least June 2014, though the quantum he is holding has been changing. As on June 30, 2014, Bachchan held 3.39 per cent in the company, which could have been worth around ₹9 crore at that time, while the value of his latest holding is almost half at about ₹4.7 crore.
The Bitcoin-driven top-up to Bachchan’s fortunes comes in the backdrop of Stampede listing one of its subsidiaries, Longfin Corp, on the Nasdaq exchange in the US.
Longfin was listed on the Nasdaq last week with a market cap of $370 million, after it sold shares in a public offer at $2.5 apiece. Stampede now owns a 37.14 per cent stake in Longfin, by virtue of which Bachchan (with his 2.38 per cent stake in Stampede) becomes an indirect beneficiary in the US-listed firm.
The stock suddenly saw a huge two-day surge of 2,500 per cent post announcement of an acquisition of Ziddu.com, a Web site that claims to specialise in providing warehouse coins, powered by blockchain technology, to importers and exporters of commodities against their warehouse receipts. This made Longfin one of the few listed stocks with direct or indirect association with the Bitcoin buzz.
Longfin acquired the Web site from a Singapore-based entity named Meridian Enterprises Pte Ltd, in which 95 per cent of the equity was owned by Venkat S Meenavalli, the CEO and Chairman of Longfin Corp and also the main promoter of Stampede.
Longfin has entered into an asset purchase agreement with Meridian, and with related affiliates collectively represented by Hong Kong-based Galaxy Media Ltd, in exchange for 2.5 million restricted Class A common shares of the company.
As per the regulatory filings made by Longfin with the US regulator SEC, the distribution of these 2.5 million shares for acquisition of Ziddu.com is as follows — 2.15 million to Meridian, 100,000 shares to Galaxy Media, 125,000 to Amitabh Bachchan and another 125,000 to his son, Abhishek Bachchan.
At the current stock price of $41, the Longfin shares of the two Bachchans would be worth about $10.25 million.