What happened
Shares of Ebang International Holdings (EBON -11.04%) jumped on Friday even though many other cryptocurrency stocks were down. This is likely because most public cryptocurrency miners only mine Bitcoin (BTC 3.96%), and Bitcoin is down today. However, Ebang International also mines Dogecoin (DOGE 7.01%), and Dogecoin has soared to all-time highs. As a result, Ebang International stock was up 22% as of 10:45 a.m. EDT.
So what
In fact, Ebang International differs from many of its publicly traded peers. In the first place, it's a vertically integrated business, meaning it both creates the cryptocurrency mining machines and also mines various cryptocurrencies. Specifically, it has equipment for Bitcoin, Dogecoin, and Litecoin. Over the past 24 hours, Bitcoin is down 2% and Litecoin is flat, but Dogecoin is up a stunning 177%.
Image source: Getty Images.
Since it's one of the few public mining companies associated with Dogecoin, it appears investors are jumping back into Ebang International stock because of its sudden run-up.
Now what
Ebang International stock has fallen more than 50% recently in response to a short report -- a short-seller is someone who's betting on the stock going down. The report came out on April 6. However, on April 13, Ebang International's CEO penned an open letter to shareholders addressing the report. Therefore, it's reasonable to assume that Dogecoin is not the only catalyst for Ebang International stock today. It's also likely that this response from management is helping investors regain some lost confidence.
So who's right, the short-sellers or Ebang International management? Most retail investors, myself included, don't have first-hand knowledge of the inner working of this business. Therefore, we don't have anything concrete to go off of except for business results as they come in. In time, the fundamentals will confirm or deny bearish sentiment.
Ebang International is expected to release full-year results for 2020 soon. A single financial report isn't definitive. But it will be an important step in validating management's expressed goals.
