Innovation Beverage Group's stock declined by over 10% in early premarket trading on Thursday, partially reversing the gains from the previous session when its merger news sent the stock rallying.

The Australian beverages company, known for Twisted Shaker cocktail and Australis Gin, announced on Wednesday that it is merging with BlockFuel Energy Inc., an oil and gas exploration company that supplies power for Bitcoin mining.

The unusual merger will "maximize shareholder value," IBG CEO Sahil Beri said, adding that it also provides "a public vehicle for BFE to introduce itself to the capital markets." The resultant company is expected to have a valuation of $220 million to $343 million, according to the company statement.

To be sure, it is a reverse triangular merger, wherein the subsidiary of the acquiring company merges into the target company. The target company survives the merger, and the subsidiary disappears.

IBG stock gained 25.2% on Wednesday, taking the company's market cap to $9.4 million.

On Stocktwits, the retail sentiment for the IBG ticker shifted to 'neutral' as of early Thursday, from 'bearish' the previous day, with some users flagging risk.

The merger is expected to close in the ongoing quarter. Upon completion, the company's ticker symbol will change to "FUEL" and BlockFuel CEO Daniel Lanskey will take over as chairman of the board and CEO of the resultant company, which will be 10% owned by the current shareholders of IBG and 90% owned by those of BlockFuel.

Owners of BFE will also own 90% of IBG post-transaction.

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