Skyrocketing – Earlybirds Invest

Cronos (CRO -2.66%) has been one of the hottest gainers in the crypto market over the last week of trading. The company’s share price had risen 100% over the last seven days of trading as of 6:15 p.m. ET Saturday.

Cronos has seen massive gains this week thanks to news that the cryptocurrency will be a key holding for a new crypto-treasury company connected to President Trump that looks poised to launch in the near future. As of this writing, Cronos has a market capitalization of roughly $10.5 billion and ranks as the 17th-largest cryptocurrency by valuation.

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Cronos has seen massive gains following Trump-connected deal

Trump Media announced on Tuesday that it had entered into a partnership that would facilitate the merging of Crypto.com with special purpose acquisition company (SPAC) Yorkville Acquisition to create Trump Media Group CRO Strategy — a new publicly traded company. Cronos is a cryptocurrency launched by Crypto.com, and Trump Media Group CRO Strategy will be purchasing $1 billion worth of the token for its treasury.

Upon completion of the SPAC merger, foundations are place for Trump Media Group CRO to have $200 million in cash and $220 million cash-in mandatory exercise warrants,, and secure a $5 billion credit line. With the new company having access to a large capital base, it’s possible that the large prospective cash pile could be used to purchase more Cronos tokens.

What’s next for Cronos?

The new partnership with Trump-connected companies has been a big bullish catalyst for Cronos and could help push its valuation higher. On the other hand, this doesn’t necessarily guarantee that Cronos will be a strong performer.

For one prominent counterexample, consider the Official Trump cryptocurrency. While the token’s market capitalization surged as high as $5.5 billion shortly after it was launched and endorsed by President Trump on social media, its valuation has now fallen to roughly $1.7 billion. The fact that a crypto-treasury company built around Cronos holdings is seemingly on the horizon may suggest a significantly higher level of institutional support, but it still looks like a high-risk investment.

SentinelOne stock surges on buyout report

Israeli news outlet Calcalist recently reported that Palo Alto Networks was in the advanced stages of contract negotiations to acquire SentinelOne. While Palo Alto Networks has subsequently said that there is no truth to the report that it’s on track to buy the cybersecurity specialist, that hasn’t stopped SentinelOne from seeing big valuation gains in today’s trading.

What’s next for SentinelOne?

In light of Palo Alto Networks’ denial of the buyout report, it’s tough to get a read on what the near-term future for SentinelOne stock looks like. Denying buyouts is par for the course before the potential deals are actually closed. It’s also possible that there’s little or no truth to reports that SentinelOne is on track to be acquired by Palo Alto Networks in the near future.

SentinelOne doesn’t necessarily need to be acquired by Palo Alto or another large player in the cybersecurity market in order to deliver strong performance for long-term investors. On the other hand, the recent rally for the stock makes it riskier to buy now if the buyout news proves to be largely unfounded.

Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends SentinelOne. The Motley Fool recommends Palo Alto Networks. The Motley Fool has a disclosure policy.