Phunware (PHUN) buys bitcoin: price spikes, shares fall
18:24, 22 November 2021
Phunware shares fell 10% Monday, while Bitcoin prices rose 4.47% after the mobile software and blockchain company announced it purchased an additional 398 Bitcoin for roughly $23.8m.
Shares of the Austin, Texas-based company fell as much as 10.5% to $3.31 per share from Friday’s $3.70 closing share price. Phunware stock trades on the Nasdaq exchange under the ticker “PHUN”.
Bitcoin prices, however, spiked $2,500 (£1,866.47), or 4.75% to $59,289.40 from $56,751.50 within 10 minutes following the 8:30 ET (UTC-5) release.
The recent purchase of 398 Bitcoin, totalling $23.8m for an average $59,917 per coin, brings Phunware’s total Bitcoin holdings to 529 coin or $31.8m total with an average $60,191 purchase price, the company stated in its release announcing the purchase. Currently, roughly 10% of Phunware's market capitalisation is in Bitcoin.
This represents a significant increase in Bitcoin holdings for Phunware, which as of 30 September reported digital asset purchases, “comprised solely of Bitcoin,” totalling $1,497, the company reported in its third quarter Form 10-Q filing with the US Securities & Exchange Commission. Phunware added it received $87 in both Bitcoin and Ether as payment for services during the same time frame.
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On Friday, Phunware announced it would begin issuing a new cryptocurrency token, dubbed PhunCoin. Following the distribution of 100 billion PhunCoin, of which Phunware reserves 72 billion, or 72%, with a current value of $0.008 per PhunCoin.
PhunnCoin is part of a duel-token economy, in tandem with its previously issued PhunToken, which aims to blockchain enable Phunware’s consumer data platform.
“As we work to commercialise a truly decentralised data economy, we’re thrilled to begin building a market for one of the world’s first regulated cryptocurrencies designed for mainstream adoption,” said Phunware CEO Alan Knitowski in a release announcing the PhunCoin. “PhunCoin is an important first step towards ensuring consumers not only control their data but also are compensated fairly when their data is purchased by brands.”
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Phunware stock gained attention in relation to the announcement that a blank cheque company, SPAC Digital World Acquisition, was merging with Trump Media & Technology Group. Having previously coordinated the Trump-Pense 2020 Presidential re-election campaign, Phunware stock rose from $1.58 to $24.04 shortly after the merger announcement.
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