Please ensure Javascript is enabled for purposes of website accessibility

Why Xunlei Ltd. Stock Tumbled Today

By Timothy Green - Updated Dec 5, 2017 at 4:53PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The cryptocurrency-driven gains of the past two months continue to unravel.

What happened

Shares of Chinese internet company Xunlei Ltd. (XNET 2.53%) continued to crumble on Tuesday. The stock had gained about 475% since Oct. 12, when the company announced a cryptocurrency project. Those gains have been unraveling as the euphoria fades. The stock was down about 15.4% at market close on Tuesday.

So what

Xunlei announced its "Wanke coin mining" project on Oct. 12. The stock rocketed higher on pure speculation. That rally ended in late November.

XNET Chart

XNET data by YCharts.

On Nov. 29 Xunlei issued a statement regarding its cryptocurrency project in an attempt to quell reckless speculation:

The Company believes that Wankebi is a kind of digital asset and can be used on the Company's internet properties and should not be traded on other transaction platforms. When developing blockchain technology, the Company utilizes such features as openness, transparence and security for their applications. Wankebi is only a symbol of proof for these applications, rather than a subject of speculation.

Since peaking on Nov. 24, shares of Xunlei are down about 45%.

A man with his head on a table, with a slumping stock chart in the background.

Image source: Getty Images.

Now what

Shares of Xunlei are still up more than 200% since the beginning of October, prior to the cryptocurrency announcement. That gain was driven by wild speculation. Cryptocurrency mania may keep the stock afloat for a while, but those speculating on Xunlei shares should be prepared for more declines.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Xunlei Limited Stock Quote
Xunlei Limited
XNET
$1.62 (2.53%) $0.04

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
311%
 
S&P 500 Returns
110%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.