Stablecoin Development Corp sees unexplained tenfold price surge

For months, Stablecoin Development Corp had a market cap hovering at about $50 million. Then, without any identifiable cause, its price surged tenfold within two weeks.

Tether holds a significant stake in the firm. Its main activity seems to be collecting interest on USDS, which is not necessarily a highly profitable venture.

The company had over $150 million in assets and little debt, so its $50 million market cap might have been undervalued. However, at its peak, the stock hit nearly $10, giving it a $500 million valuation — far above its actual asset base.

Since then, the share price has dropped to about $4.50, again without any news catalyst.

Short sellers unable to find shares; Tether warrants nearing exercise date

Short sellers have had difficulty locating reasonably priced shares to borrow. Meanwhile, the company's market value has kept climbing since September 25, with no clear explanation for the rapid rise.

Four days after the abnormal trading began, Stablecoin Development Corp submitted a filing with the SEC stating it did not know the cause or the parties involved.

In the same filing, the company said it "does not believe corrective actions are appropriate."

Tether holds warrants in the company that become exercisable in mid-October.

Those warrants, previously considered nearly worthless, have now gained considerable value.

Additionally, the company appears to have escaped the risk of being delisted from the NYSE American.