What happened
Shares of mobile app developer Cheetah Mobile (CMCM 5.37%) jumped on Thursday following a report from a Chinese-language website stating the company is planning a blockchain-related initiative. The report cited an interview with the CEO of Cheetah Mobile. The stock was up about 15% at 11:30 a.m. EST.
So what
Cheetah Mobile will reportedly focus on helping users protect their digital assets, but won't participate in cryptocurrency trading. Of course, nothing will protect those digital assets when the cryptocurrency bubble eventually bursts.
Image source: Getty Images.
This is far from the first instance of blockchain-related news driving big gains in the past few months. Shares of Eastman Kodak, Seven Stars Cloud Group, and Cogint Inc. all surged on Wednesday thanks to separate announcements. In the case of Cheetah Mobile, all it took was an unconfirmed foreign-language report that mentioned blockchain for speculators to pile into the stock.
The surge on Thursday brings Cheetah Mobile's shares to their highest level since early 2016.
Now what
Warren Buffett warned on Wednesday that the mania surrounding cryptocurrencies will come to a bad ending "almost with certainty." We've reached a point where even unconfirmed rumors about blockchain can push a stock much higher.
There are legitimate reasons to be interested in Cheetah Mobile as an investment. An unconfirmed report about blockchain is not one of them.
