Why Shares of Seven Stars Cloud Group Are Soaring Today

Why Shares of Seven Stars Cloud Group Are Soaring Today

What happened

Shares of Seven Stars Cloud Group (NASDAQ: SSC) , which focuses on supply chain and digital finance solutions powered by artificial intelligence, jumped on Monday. There was no company-specific news, but with Seven Stars having announced a blockchain-based initiative earlier this year, it’s safe to say that the surge in cryptocurrency prices is the main driver behind this gain. The stock was up 23% at noon EST, although it was down just two hours earlier.

So what

Seven Stars stock has risen about 240% since Sept. 1. The company announced on Sept. 28 plans to launch an asset-backed securitization, tokenization, and exchange platform by the end of the year, claiming that it will be the first such platform to be powered by artificial intelligence and blockchain.

A coin with a B on the face, against a background of a chart.

Image source: Getty Images.

This buzzword soup has pushed up shares of Seven Stars against the backdrop of rising cryptocurrency prices. Bitcoin has risen from a few thousand dollars to nearly $20,000 over the past three months, and other cryptocurrencies have surged in price as well. Seven Stars is far from the only stock to surge due to the cryptocurrency boom. E-commerce company Overstock.com is one other example , up about 200% since Sept. 1.

Now what

Seven Stars’ market capitalization now sits at around $300 million. The company generated $107 million of revenue over the past 12 months, with a gross margin of just 3.9% and a net loss of $25 million. The stock’s surge is being driven by speculation, not the fundamentals.

10 stocks we like better than Seven Stars Cloud Group, Inc.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and Seven Stars Cloud Group, Inc. wasn’t one of them! That’s right — they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of December 4, 2017

The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Related posts