61个 employee Shares of The9 Limited (NASDAQ:NCTY) soared on Tuesday after the company announced the purchase of equipment for mining a cryptocurrency called Filecoin. It's the second big mining announcement the company has made this year, and investors appear to like this new direction for the company.
According to the press release from the company, The9 signed a $10 million agreement to buy mining equipment for Filecoin. The company said it's already purchased and deployed some. However, how much it's already spent wasn't disclosed. The9 said it still had remaining purchase obligations under the agreement it signed, and it will make more purchases at a later date. IMAG E SOURCE: GETTY IMAGES. Earlier this year, The9 stock started soaring when the company announced it was getting into Bitcoin mining. The company has issued press releases outlining multiple purchase agreements for mining equipment (remember, different cryptocurrencies often require separate mining setups). On Feb. 8, The9 stated its deals would give it 36,000 Bitcoin mining machines, resulting in a hashrate (a metric used by cryptocurrency miners -- think of it like computing power) of 800 peta-hashes (P/H) per second -- not a top player, but still a respectable hashrate. Now what In my opinion, today's move is overdone. The deal to mine Filecoin is just a $10 million deal. But The9's market capitalization increased by around $300 million this week. Perhaps some of the move is attributable to the company's Bitcoin operations, especially since Bitcoin briefly touched a record high above $54,000. But this is still a stock I think investors should be cautious with.
Shares of The9 Limited (NASDAQ:NCTY) soared on Tuesday after the company announced the purchase of equipment for mining a cryptocurrency called Filecoin. It's the second big mining announcement the company has made this year, and investors appear to like this new direction for the company.
According to the press release from the company, The9 signed a $10 million agreement to buy mining equipment for Filecoin. The company said it's already purchased and deployed some. However, how much it's already spent wasn't disclosed. The9 said it still had remaining purchase obligations under the agreement it signed, and it will make more purchases at a later date.
Earlier this year, The9 stock started soaring when the company announced it was getting into Bitcoin mining. The company has issued press releases outlining multiple purchase agreements for mining equipment (remember, different cryptocurrencies often require separate mining setups). On Feb. 8, The9 stated its deals would give it 36,000 Bitcoin mining machines, resulting in a hashrate (a metric used by cryptocurrency miners -- think of it like computing power) of 800 peta-hashes (P/H) per second -- not a top player, but still a respectable hashrate.
Now what
In my opinion, today's move is overdone. The deal to mine Filecoin is just a $10 million deal. But The9's market capitalization increased by around $300 million this week. Perhaps some of the move is attributable to the company's Bitcoin operations, especially since Bitcoin briefly touched a record high above $54,000. But this is still a stock I think investors should be cautious with.