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Why Shares of Limited Popped 75% Today

By Travis Hoium - Feb 16, 2021 at 3:49PM

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Bitcoin is driving the company's shares higher.

What happened 

Shares of Limited (BTCM -3.81%) jumped as much as 75% in trading on Tuesday after announcing an acquisition and as Bitcoin (BTC -3.11%) briefly climbed to over $50,000. Shares settled at a 38.9% gain as of 3:20 p.m. EDT. 

So what 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 and the mining pool business of Bitdeer Technologies.

A Bitcoin symbol laying in the dirt.

Image source: Getty Images.

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. 

Now what

This is still a speculative growth stock, but with Bitcoin on the rise, there's good reason investors are bidding up 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 is $1.2 billion. That's a highly valued stock that could crash just as quickly as it's risen in this volatile market. 

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Stocks Mentioned

BIT Mining Limited Stock Quote
BIT Mining Limited
$2.02 (-3.81%) $0.08
Bitcoin Stock Quote
$29,346.14 (-3.11%) $-941.37

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