Innovation Beverage Group Ltd ( IBG ) said Wednesday it has taken a major step in its strategic transformation by acquiring a 51% controlling stake in BlockFuel Energy Inc., advancing its planned merger and pivot into the energy sector.

• Innovation Beverage Group ( IBG ) shares are retreating from recent levels. Why are IBG shares down?

IBG acquired 127,628 BlockFuel shares through a share exchange agreement. It issued warrants for 3.8 million IBG shares, subject to approvals. These will convert into 20.6 million shares upon completion of the merger.

The company also provided a $2.5 million unsecured loan to BlockFuel, strengthening its ownership position.

Post-Merger Structure and Ownership

Under an amended merger agreement, BlockFuel will become a wholly owned subsidiary, with its shareholders expected to own about 90% of the combined entity.

The business will operate under the BlockFuel Energy name, while IBG's beverage segment will continue as a separate subsidiary, led by IBG’s CEO, Sahil Beri, as president. The new parent company will focus on scaling its U.S. onshore oil and gas operations.

Operations and Growth Outlook

BlockFuel focuses on oil and gas asset development and converting natural gas into electricity for high-performance computing, with operations primarily in the U.S., including Oklahoma.

The transaction provides IBG with exposure to producing and development-stage assets, supporting near-term revenue and long-term growth.

“Completing the acquisition of a controlling interest in BlockFuel Energy advances our strategic transition and brings the merger closer to completion,” said CEO Sahil Beri.

“We are positioning IBG for long-term growth by focusing on energy assets with strong fundamentals and near-term production potential, while maintaining our beverage business as a distinct subsidiary.”

“This transaction marks a significant step in building a scalable, U.S.-focused energy platform,” said BlockFuel CEO Daniel Lanskey.

High Short Interest

Short interest in Innovation Beverage Group ( IBG ) rose sharply from 34.62K to 832.00K shares, accounting for 47.92% of the float.

Despite the spike, the relatively high trading volume means short sellers could cover their positions in about one day without significantly impacting the stock price.

Technical Analysis

The stock is trading 59.4% below its 20-day SMA, signaling short-term weakness. It is also 86% below its 100-day SMA, indicating broader medium-term pressure.

Over the past 12 months, shares have decreased by 91.94%, and they are positioned closer to their 52-week lows than highs, reflecting ongoing challenges for the company.

The RSI is at 32.66, which is considered neutral territory, suggesting that the stock is not yet oversold. Meanwhile, the MACD shows a value of -0.9869, below its signal line at -0.9124, indicating bearish pressure on the stock.

The combination of neutral RSI and bearish MACD suggests mixed momentum, reflecting uncertainty in the stock’s performance.

Key Resistance: $2.50

Key Support: $1

IBG Stock Price Activity: Innovation Beverage ( IBG ) shares were down 8.26% at $1.11 at the time of publication on Wednesday, according to Benzinga Pro data.