What happened

Shares of Seven Stars Cloud Group (NASDAQ:SSC) soared on Wednesday after the company announced the acquisition of an additional 20% stake in BBD Digital Capital Group. A mention of blockchain in the press release announcing the deal was enough to trigger the rally, adding to Monday's gain. Shares of Seven Stars were up about 34% at 12:20 p.m. EST.

So what

Seven Stars will pay $9.8 million, composed of $2 million in cash and $7.8 million worth of common stock, to Tiger Sports Media Limited for a 20% stake in BBD Digital Capital. Seven Stars already owns 40% of the company, so this deal will make it the majority owner.

A rising stock chart.

Image source: Getty Images.

"BBD Digital Capital will focus on leveraging the BBD brand with artificial intelligence-driven financial data services as well as transactional platforms for index, futures and derivative trading, for both global commodity and energy clients," according to the press release.

Why is such a small transaction causing the stock to soar? Here's the relevant line in the press release: "BBD Digital Finance is positioned to operate a global AI + Blockchain digital issuance & trading platform of index / future derivatives."

Now what

The mania surrounding cryptocurrencies and blockchain technology is what's driving shares of Seven Stars higher. The stock is now up more than 300% over the past three months due solely to blockchain-related announcements. That's despite the company being unprofitable, producing a $25 million net loss over the past 12 months. Buyer beware.

Timothy Green has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.