Shares of Chinese internet platform company Xunlei Limited (NASDAQ:XNET) slumped on Tuesday. There was no company-specific news driving the decline. The stock has exploded higher since Xunlei launched its own cryptocurrency project on Oct. 12, riding the cryptocurrency wave. Tuesday's decline may be a simple correction following a 475% gain in less than two months. Shares of Xunlei were down about 14% at 12:10 p.m. EST.
Bloomberg called Xunlei the hottest stock on the Nasdaq last week, and for good reason. After launching its "Wanke coin mining" cryptocurrency project on Oct. 12, the stock went from less than $5 per share to nearly $25 per share. It now sits around $18 per share after a couple days of declines following a jump last Friday.
Xunlei's cryptocurrency project launch coincides with Bitcoin's incredible run-up to $10,000. Xunlei is currently only exploring the blockchain technology that underlies cryptocurrency, so this rally is solely the result of cryptocurrency mania. Tuesday's slump may not mark the end of this euphoria, but it's impossible to know for sure.
A Xunlei executive told Bloomberg he hopes "investors flock to us because of the future of 'shared computing' and their trust in our new management team, rather than for speculation." Right now, speculation is overwhelming everything else.