Utilizing blockchain technology, Cryptyde, Inc. (NASDAQ: TYDE) is focused on providing innovative web3 products related to NFTs, crypto, smart contracts, and the metaverse. Following its spinoff from Vinco Ventures, Inc. (NASDAQ: BBIG), TYDE has laid out its plans for developing its Bitcoin mining, Web3, and Freescape metaverse operations. With this in mind, the company has recently announced its intention to acquire a fintech, e-commerce company which could provide a stable revenue source for the company moving forward.
TYDE Stock News
Based on its focus on providing web3 products, TYDE intends to acquire and build brands that utilize blockchain technology in music, movies, gaming, and digital art. To facilitate this, TYDE is offering such products through its web3 subsidiary Blockhiro which is expected to become a web3 business using decentralized blockchain technology to disrupt consumer facing industries.
With this in mind, TYDE is looking to further develop this business line as it is currently developing a digital coin minting platform which is expected to launch this year. Through this platform, TYDE has the potential to become a major player in the blockchain industry since this platform could be used by established blockchain projects to create their own digital tokens efficiently. In light of this, TYDE stock could be well-positioned to soar once this platform is launched.
Meanwhile, TYDE is venturing into the metaverse industry as it is currently developing its own story-driven metaverse – Freescape. This metaverse is a character driven ecosystem with themed interactive environments. In this metaverse, users will be able to collect, gift, transact, and swap resources, real estate, as well as physical assets using Freescape tokens. With this in mind, Freescape has the potential to attract a lot of attention given its unique avatars, five in-game worlds, and storyline tied to a six-figure cash prize. In the meantime, TYDE is working to announce the next launch phase of Freescape. Considering this metaverse’s potential to become one of the most popular metaverses, TYDE stock could be set to soar once Freescape is launched.
TYDE is also operating in the lucrative Bitcoin mining industry through its JV CW Machines. This JV is already generating revenues for the company as it started its crypto mining equipment reselling business in Q1. As a reseller of Bitcoin mining equipment and services, CW Machines sells high quality miners like Antminer S19s, Antminer S19 Pros, Whatsminer, and Canaan.
At the same time, this JV includes the reselling of co-location services which offer a physical location and ancillary services from third-parties for Bitcoin mining through its tokenized Bitcoin mining environment – Wond. This service has the potential to witness high demand as it allows customers to pool processing resources and split rewards while mining for Bitcoin. With this service set to be launched for pre-sale later this year, TYDE stock could be one to hold in anticipation.
Looking to grow this business, TYDE entered into an energy program development agreement with Argo Energy, LLC. According to this agreement, Argo will help TYDE identify power delivery and site development solutions for the infrastructure required to offer Bitcoin mining services. In this way, TYDE will be able to offer its services while mitigating the risks of soaring energy prices and reducing carbon emissions by using a combination of solar and other renewable energy sources. Given that the company expects to generate 150 megawatts of power through this agreement, TYDE could witness high demand for this service since it would be cheaper than its competitors as it uses cheap energy sources.
In addition to its web3 offerings, TYDE is engaged with selling custom packaging for products through its subsidiary – Ferguson Containers. Established in this business since 1958, Ferguson is one of TYDE’s main revenue streams as it looks to further develop its web3 offerings. Considering Ferguson’s relationships with customers in several lucrative industries, TYDE intends to capitalize on these relationships to offer its services for Ferguson’s customers. Moreover, TYDE plans to utilize blockchain technology in improving Ferguson’s business by developing blockchain-based supply chain solutions. In light of this business model, TYDE stock could be a profitable long-term hold as it continues developing its diversified businesses.
TYDE Stock Short Interest
Although the company offers significant upside potential, TYDE stock has been subject to aggressive short selling activity due to the company’s connection with BBIG. According to Ortex data, TYDE stock’s short interest is 15.1% with a 250.6% cost to borrow and 28.9% shares on loan. At the same time, TYDE is witnessing increased interest from Reddit and Fintwit investors as a potential short squeeze candidate. In light of this, TYDE stock could be one to watch for a potential short squeeze. Considering the company’s upcoming catalysts, a short squeeze could send TYDE stock to new highs if enough volume is present.
*Updated October 3rd 2022
Since its spinoff, Cryptyde has been making steady progress towards the goals outlined in its corporate objectives. According to TYDE’s CEO – Brian McFadden – the company has made significant progress towards its initiatives and he is “excited with where we are in such a short period of time operating as an independent company”.
Forever 8 Fund
It appears that TYDE is eager to keep up the pace, leading the company to announce its acquisition of Forever 8 Fund, LLC’s membership interests. Similar to the AIMEE platform developed by Aterian (NASDAQ: ATER), Forever 8 has created a proprietary due-diligence tool that analyzes a number of factors related to the products sold by e-commerce businesses operating on Amazon, Shopify, and other platforms. Unlike Aterian which typically acquires these brands or develops new products based on AIMEE’s analysis, Forever 8 provides inventory funding using its “decentralized, SKU-based funding model”. This means that e-commerce business owners do not need to meet traditional lending requirements if its sales data meets certain parameters.
The fund’s next step is to directly purchase the inventory from its approved customers as well as any future inventory directly from the supplier. These purchases are done at a mark up and Forever 8 sees a return on its investment in the form of revenue collected from the products sold.
According to Forever 8, this model allows e-commerce businesses to focus on sales, marketing and product line expansion while Forever 8 acts as an inventory capital solution. Because this is a scalable model in a quickly growing industry, there is significant potential for Forever 8’s business model to develop further.
For example, private Amazon business aggregators have taken off as Amazon’s fulfillment centers expand globally. These private companies utilize their industry experience to acquire Amazon sellers with promising growth and products – confident that they can generate greater revenues. So far, at least 33 of these companies have raised at least $100 million in funding rounds as many venture capitalists appear bullish on the industry’s potential. This highlights the applications of Forever 8 Fund’s services for individual e-commerce businesses and potentially Amazon aggregators as well.
Recognizing the importance of these services, Cryptyde sees this as a “phenomenal opportunity” as it “begins to develop and deploy its core suite of products that will help power the future of Web3”. With this in mind, TYDE has plans to implement tokenized funding, Web3 funding opportunities, and smart contracts within Forever 8’s business model once the acquisition is completed. TYDE’s management believes that integrating these services with the blockchain will only improve its results and will prepare it to disrupt consumer-facing industries.
The upfront cost of the acquisition is $56.4 million, $21.5 million of which would be paid for in the form of cash or equity capped at the issuance of 10.75 million shares. An additional $27.5 million would be paid for in the form of 3-year convertible notes and the remaining $7.4 million would be in assumed debt obligations.
Forever 8 could be paid an additional $37 million in cash or equity capped at an issuance of 18.5 million shares. However this is contingent on pre-determined earnout milestones. In the case that Forever 8 generates $115 million of cumulative collected revenue by August 2025 it would receive an additional $15 million. With additional payments in the form of shares or cash dependent on its revenue performance into 2026.
The way this deal is structured suggests that the company sees the potential to generate significant revenue from the Forever 8 Fund and TYDE has already shared that this acquisition “stands to bring Cryptyde significant revenue in the back half of 2022 and provide a stable foundation for the future.”
Considering that TYDE was spun off only a few months ago, this acquisition could be a major step forward for the company
TYDE Stock Financials
According to its Q2 financials, TYDE reported a notable increase in its assets – increasing from $14.8 million in Q1 to $51.4 million in Q2. However, restricted cash totaling $30 million makes up a large part of the company’s current assets. Its cash and cash equivalents have also increased QoQ from$1 million to $9.96 million.
TYDE’s total current liabilities amount to $12.6 million, the bulk of which are liabilities due to its former parent. In addition, the company has convertible notes payable totaling $25.5 million
As for revenues, TYDE realized $3.7 million in Q1 which increased to $7.34 million in Q2. Despite this achievement, the cost of generating this revenue has remained high leaving TYDE with a gross profit of only $799 thousand. In total the company reported a net loss of $3.45 million for the quarter – up from $1.13 million in Q1.
@BullshornFinancial believes that TYDE stock is undervalued at its current price
While short interest for TYDE stock has dropped, @In_GENIO_MEX highlight’s Ortex’s short squeeze score of 70.4
TYDE stock has recently formed a new low at $0.652 but since the stock recently listed on the NASDAQ there is still not enough data to show whether this is a strong support for the stock. Despite the acquisition’s potential to bring additional revenues to Cryptyde in the long-run, it could dilute current shareholders with a maximum issuance of 10.75 million shares.
The free float is currently 30 million shares – a roughly 10 million share increase from its 20.3 million float in August. This dilution could have been for the acquisition of Forever 8, but investors should be aware of the risk of additional share issuances in the short-term leading up to the close of the acquisition.
With a current market cap of $21.6 million, TYDE stock has dropped notably from its IPO price. However, this is not unusual and as the company continues to pursue its growth plans the stock will likely stabilize.
Currently, accumulation is seeing a slight uptick. Accumulation had been dropping following its IPO as those not willing to hold the stock for its long-term catalysts exited their positions. The RSI is now at 50 and the MACD is bullish to the upside.
TYDE Stock Forecast
According to its corporate objectives, TYDE plans to spend the rest of 2022 and the first half of 2023 focusing on the transition from Web2 to Web3 in consumer facing industries to attract more customers to its products and services. Moreover, TYDE will diversify its offerings across different Web3 industries and will explore opportunities for strategic partnerships and acquisitions to grow in the Web3 space.
TYDE’s planned acquisition of the Forever 8 Fund is in line with these goals and could lead to new opportunities in the Web3 space. Meanwhile the company is preparing to announce the next launch phase of Freescape and could release new details regarding its metaverse. TYDE’s agreement with Argo has also put the company in a better position to secure new deals in the bitcoin mining industry. As Cryptyde continues to make progress towards these goals, TYDE stock may see an uptick.
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