DeFi Technologies Inc., a publicly traded provider of decentralized finance products, saw its shares plummet nearly 28% on June 18. The sharp decline followed the company’s criticism of a report which claimed the recent recovery of its stock was for dubious reasons. The controversial report was published by CoinSnacks, a crypto-focused news outlet, and it alleged that DeFi Technologies had engaged in suspicious email campaigns.
CoinSnacks’ report accused DeFi Technologies of paying crypto influencers to promote its stock, which had surged 3,400% over the past year. DeFi Technologies responded with a press release on June 19, refuting these allegations as baseless and accusing CoinSnacks of acting in the interests of short sellers. CoinSnacks has denied these claims.
Yahoo Finance data showed that DeFi Technologies’ stock closed at 3.10 Canadian dollars on June 17, reflecting a 320% gain since the start of the year. However, the stock dropped 27.7% to close at 2.24 Canadian dollars on June 18, before slightly rebounding to 2.30 Canadian dollars by June 19.
How Did Key Figures Influence the Situation?
The CoinSnacks report alleged that DeFi Technologies funded an email and influencer campaign to bolster its shares, citing 15 promotional emails sent over ten days. The report also mentioned that notable crypto influencers Anthony Pompliano and Will Clemente, who are associated with the company’s joint venture Reflexivity Research, supported these promotions.
Key Takeaways for Investors
It’s essential for investors to be vigilant and consider the following:
- Evaluate reports critically, considering potential biases or motives behind them.
- Monitor stock performance closely, especially after significant news or allegations.
- Understand the role of influencer endorsements in stock promotions.
In conclusion, DeFi Technologies strongly criticized the CoinSnacks report, labeling it defamatory and misleading. The company believes the report was crafted to benefit short sellers by driving down its stock price. CoinSnacks, however, maintains that their report was impartial and not influenced by short sellers.