Chanticleer Holdings, which owns nine Hooters restaurants and other regional burger chains like Little Big Burger, announced today that it was putting its loyalty programs on the blockchain. And just like other companies that have recently issued press releases with the word “blockchain,” its stock price shot through the roof.
The Nasdaq-listed stock, BURG, was up 50 percent this morning, jumping to $4.87 per share after the market opened. The price dipped down a bit from its morning high, but it’s still up 40 percent today.
What’s the practical purpose of putting a loyalty program like the Hooters HootClub (seriously, that’s what it’s called) on the blockchain? That part isn’t clear. But companies are learning very quickly that just saying the word “blockchain” can cause your stock price to multiply.
Recently, an iced tea maker decided to change its name from Long Island Iced Tea to Long Blockchain. The stock tripled instantly. And when a financial technology company called LongFin bought a virtually worthless crytpocurrency company last month, its own stock price shot up 2,000 percent.
But theses companies insist that using blockchain technology makes perfect sense for their consumers.
“We wanted to expand our existing loyalty program with something that really changes the way our customers can leverage their rewards; Mobivity Merit is real cryptocurrency, leveraging the same infrastructure and principles of Bitcoin, Ethereum, Ripple, Litecoin, and more, and will enable our customers to make use of their rewards in entirely new ways,” said Michael Pruitt, CEO of Chanticleer Holdings in a press release.
Ah, yes, this way... customers can.... leverage....... their.......... rewards. Well, when you put it that way.
“Use your Merit mined by eating at Little Big Burger to get a buffalo chicken sandwich at American Burger Co., or trade them with your vegan friend so he can get a veggie burger at BGR. And that’s just the beginning,” he continued.
And I suppose that expanding your loyalty program to incorporate all of your different brands makes some sense, but couldn’t the company do that without using blockchain tech?
The company notes that all of the loyalty programs will now be controlled by the consumer, but it’s again not entirely clear what that means to the average person and who exactly is going to take advantage of it. All we know for sure? The company’s stock is doing really well today. And it looks like 2018 will be the year every other company tries to make the exact same thing happen with their own stocks.
Correction: This post originally identified Chanticleer Holdings as the parent company of Hooters. It in fact owns only nine of the more than 400 locations globally. We regret the error.