Shares of Chinese would-be blockchain company Xunlei (NASDAQ:XNET) are taking a beating this morning. Down as much as 30% in early trading, the stock is still trading 26.3% lower as of 11:30 a.m. EST.
And yet, the only news out of Xunlei today appears to be -- or at least management probably thought it would be -- good news. This morning, Xunlei touted its appearance at the Las Vegas CES 2018 consumer electronics show, where it says it "exhibited its latest product OneThing Cloud and attended the 'Geek Night' event."
Xunlei went on to explain that "OneThing Cloud is a private cloud offering such functions as secured storage, convenient file management, remote control, multimedia entertainment, etc. And by voluntarily participating in our OneThing reward program, users of OneThing Cloud can share with us their idle bandwidth, storage space and computing power and receive LinkToken as rewards."
LinkToken, then, appears to be the blockchain bitcoin-like virtual money that Xunlei has been talking about developing. But whatever it is exactly, it seems clear that investors don't like it. Perhaps the problem is that Xunlei confided it is "seeking cooperation partners for our overseas efforts" with LinkToken (i.e. it doesn't actually have partners yet) and that "we plan to enter Hong Kong SAR market, and then southeast Asia and India" (i.e. it's not actually in any of these markets yet.
Whatever the reason Xunlei stock is selling off today, though, it's hard for me to call the sell-off a buying opportunity. Despite sporting $167 million in trailing revenue and a $1.1 billion market capitalization, Xunlei stock remains decidedly unprofitable, with a profit margin of negative 29%, no analyst estimates predicting profit growth, and no endorsements on Wall Street.
Unless and until Xunlei moves from issuing press releases to reporting profits, my advice would be to stay away from it.