At first glance, investing in UBI BlockChain Internet may seem like a sure bet.
The Hong Kong-based company says it wants to use blockchain’s decentralized-ledger technology to track the authenticity of pharmaceuticals. That positions the company to ride the interest in blockchain that has surged along with the market for the cryptocurrencies like Bitcoin that pioneered it. UBI’s stock ubiae , traded in over-the-counter markets, has risen by as much as 1,000% this year at its peak. A 3-to-1 stock split was announced today, and the company’s market value is now well north of $1 billion.
But a closer look complicates that rosy picture. According to a report today from Bloomberg, UBI BlockChain is a recent convert to its namesake technology, with its executives formerly heading up a company that made an anti-bedwetting patch called the UrinStopper. That company, in turn, had been linked in the mid-2000s by a Barron’s investigation to possible fraudulent medical claims about its products.
According to Bloomberg, UBI Blockchain today has only 18 employees, $15,406 dollars in cash on hand, no revenue, and $6.3 million in debt. The phone number listed on its SEC filings is reportedly disconnected. All that information came from a filing for the planned sale of shares personally owned by UBI executives.
Get Data Sheet, Fortune’s technology newsletter.
Stanford Professor Charles Lee was blunt, telling Bloomberg that “the profile of this company is scary,” and that “you certainly don’t want to own this stock.”
It’s yet another example of stocks mirroring the volatility and opacity of some cryptocurrencies. UBI Blockchain is one of at least a dozen small-cap companies who have announced shifts to focus on blockchain in recent months. Some of those appear to be sincere pivots, while others – such as the Long Island Iced Tea company, which renamed itself Long Blockchain, or the flailing biotech company that changed its name to Riot Blockchain – have the whiff of either desperation or chicanery.
Even the best-intended of these big switches should be regarded with serious skepticism, for at least two reasons. First, finding profitable business applications for blockchain is still a huge conceptual challenge, even for committed pioneers who have been in the sector for years.
At an even more basic level, finding staff to execute these pivots seems next to impossible. Blockchain engineering requires a complex suite of skills involving not just programming, but social engineering and economics. Those skills can’t be picked up in a few weeks at a code academy, and many of the engineers who already have them are either involved in their own projects, or have been made independently wealthy by the cryptocurrency boom.
The resulting talent shortage is widely considered the biggest challenge facing the cryptocurrency ecosystem right now. Latecomers like UBI will likely have a particularly hard time attracting workers from within the tight-knit crypto community. So, as always when you hear about a hot stock tip, caveat emptor.