Key points:
- Bit Brother is up 100% this morning
- There's no obvious news to drive BTB
- But a trading position needs to be based upon information
Bit Brother (NASDAQ: BTB) stock is up 100% currently premarket (@4.50 am, 103.39%) and there's no obvious reason for BTB stock to move in this manner. So, in order to work out what we might want to do about it, to decide upon a trading position, we need to work out – as far as we can – why it is up this sort of amount.
Bit Brother stock is down 98.9% over the past 5 years, 88% over the past 12 months. So it's not something that has done well in the recent past. It's also true that Bit Brother is close to losing its NASDAQ listing – they've been below the NASDAQ minimum $1 offer price since last December. That's not something that's immediately dangerous but it will, after enough time, lead to the loss of the listing and relegation to the OTC markets.
As to what Bit Brother does it's a small series of tea shops in China. Small as in less than five by one account. This isn't, perhaps, the sort of thing that we'd expect to even have a stock market quote. There is also a distribution business attached but even then, pretty small beer. It's also not something that we'd expect to have a volatile stock price. Well, not unless there was some attempt to create a Starbucks like chain across China or something. But branding tea in that country might not be so easy.
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The actual issue that has been driving Bit Brother stock for some time now is purported involvement in cryptocurrencies. This market has been – as we've all noted – a bit off recently. And Chinese government involvement in restricting the market in that country hasn't helped in the slightest. There was a little excitement in Bit Brother a year back as they managed to get over the NASDAQ minimum offer price. That was then followed by a BTB stock placement and the general retreat of the stock price from $3 to yesterday's 11 cents.
So, what is it that's driving Bit Brother's stock today? There's no news out, nothing on the wires. There's not been any grand change in Chinese cryptocurrency regulation. No corporate announcement. So it's all a bit of a mystery.
One thought is that this might be driven by the occasional rogue trade – someone buying at well above market in a thinly traded stock can do that. But there appears to be trade of some 4 million pieces of stock so that's not it either. We've got real trade going on at these elevated prices.
The point here is not to simply shrug and say “Well, don't know”. Rather, it's to make the much more important point that a trading position is difficult to decide upon without that more information. Unless we know why Bit Brother is up 100%, more or less, then we can't really decide whether it's going to be more, or less, in the near future. Trading simply and only on the fact that others are trading is doing so in an information vacuum.
