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Bitcoin is driving the company's shares higher.
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Shares of 500.com Limited (WBAI +0.01%) jumped as much as 75% in trading on Tuesday after announcing an acquisition and as Bitcoin (BTC 0.01%) briefly climbed to over $50,000. Shares settled at a 38.9% gain as of 3:20 p.m. EDT.
500.com announced that it will issue 44.4 million Class A shares to acquire the Blockchain Alliance, amounting to about 10% of the company's shares outstanding. This includes the acquisition of BTC.com and the mining pool business of Bitdeer Technologies.
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On top of the acquisition, Bitcoin traded above $50,000 and was a positive sign for the company's shift to bitcoin mining. The rise in Bitcoin's value is analogous to an underlying commodity rising in value for a mineral miner.
This is still a speculative growth stock, but with Bitcoin on the rise, there's good reason investors are bidding up 500.com today. But we also need to remember that the company's revenue was just $1.4 million in the fourth quarter and right now, the market cap of 500.com is $1.2 billion. That's a highly valued stock that could crash just as quickly as it's risen in this volatile market.