Shares of the online art platform Takung Art (TKAT -2.04%) dipped more than 24% as of 11 a.m. EDT, continuing its extreme volatility.
Wild stock price swings have become the norm for companies like Takung that investors are hoping will jump into the non-fungible token (NFT) space.
NFTs are digital files such as art, videos, and audio stored on blockchain, which is the digital ledger technology that powers cryptocurrencies like Bitcoin. Some NFTs have already sold for millions of dollars.
Takung has been part of a group of stocks that traders could see transitioning into the NFT business. Takung runs an online platform that allows artists, art dealers, and investors to exchange and invest in artwork, so you can see how that might be a company that investors pick to make the jump, as digital art has been a big part of the recent success of NFTs.
However, there has been no actual news that Takung will actually start selling NFTs -- it's all speculation.
While speculation has been driving interest in stocks like Takung, there might be some truth to the rumors.
Yesterday, one of the hot NFT-speculation stocks, Hall of Fame Resort & Entertainment Co (HOFV 12.36%), said it plans to begin offering NFTs. The news sent shares surging by nearly 59% as of 11 a.m.
But Takung's dip is not a surprise, considering the stock, which trades near $42 per share, traded around $3 per share just a month ago. As I've mentioned in previous articles about companies with NFT speculation, trade with extreme caution.
Companies that offer NFTs may have strong revenue potential in the near term, but the NFT assets themselves will likely be volatile for some time. And they could end up being worthless in the long term. So be careful when investing in a business that is entering such a risky space.