Qutoutiao (NASDAQ: QTT) is soaring yesterday to close up more than 61%. It carried on the momentum in the pre-market, not with the same speed but still in the green even though there has been no news on the Chinese mobile entertainment company.
It was reported that China Central Television claims Qutoutiao had been selling suspicious ads with false information at an awards show, setting off a series of strikes against the company in December.
What is happening now…
Yesterday, an extraordinarily high volume of 118 million shares was traded in one day, compared to 2.0 million shares over the past three months. It has lost -6.87% to its share price since the start of the year. The price rose 102.80% during the last 5 trades and 97.27% in the previous 30 trades. However, on the positive side, the share price went up 58.97% in the previous six months and by 77.14% in the last three months.
As of December 31, about 12% of Qutoutiao’s shares were shorted, and many of these bears probably exited their bets. Significantly, it was not just the small Chinese stock that rose today. There are few others on the up.
Qutoutiao shares’ recent surge also reminds us that the stock market is highly volatile these days, which is why day traders have seized upon it in recent months, in hopes of making a quick profit.
The shares of Qutoutiao are now the highest since March, but this isn’t a typical recovery story: Its revenue fell 20% last quarter after it was hit with CCTV’s accusation.
Given the mystery surrounding today’s surge, this stock may be better avoided — those gains could easily be wiped out.