The9 Limited [NCTY] is 867.23% higher this YTD. Is it still time to buy?

The9 Limited [NASDAQ: NCTY] gained 38.12% or 9.45 points to close at $34.24 with a heavy trading volume of 3286580 shares. The company report on February 9, 2021 that The9 Announced Entering into a $100 million SEDA to Fund Business Growth.

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The9 Limited (Nasdaq: NCTY) (“The9”), an established Internet company, announced that it has entered into a standby equity distribution agreement (the “SEDA”) with YA II PN, LTD., a Cayman Islands exempt limited partnership managed by Yorkville Advisor Global, LP (the “Purchaser”), dated February 5, 2021, pursuant to which The9 would be able to sell up to US$100.0 million of its ADSs solely at The9’s request based on The9’s funding requirement at any time during the 36 months following the date of the SEDA.

Pursuant to the SEDA, the preliminary purchase price per ADS (the “Preliminary Purchase Price”) shall initially be 90% of the average of the 3 lowest daily volume weighted average price of the Company’s ADSs during the five consecutive trading days immediately prior to the delivery of an advance notice by The9 (the “Preliminary Pricing Period”) (the date of payment of Preliminary Purchase Price is the “Preliminary Closing Date”), which shall be adjusted to the greater of (A) 90% of the average of the 3 lowest daily volume weighted average price of the Company’s ADSs during the Preliminary Pricing Period and during the five consecutive trading days commencing on the trading day immediately following the Preliminary Closing Date, or commencing on the Preliminary Closing Date if the ADSs are received by the Purchaser prior to the close of trading on the Preliminary Closing Date (the “Secondary Pricing Period”), or (B) 85% of the average of the five daily volume weighted average price of the Company’s ADSs during the Secondary Pricing Period (the “Final Purchase Price”). If the Final Purchase Price is less than the Preliminary Purchase Price, The9 shall deliver additional shares to the Purchaser. If the Final Purchase Price is greater than the Preliminary Purchase Price, the Purchaser shall make payment of the additional amount to The9. The purchase would be subject to certain ownership limitations as provided under the SEDA. The Purchaser has agreed that, during the term of the SEDA, neither the Purchaser nor its affiliates will engage in any short sales or hedging transactions with respect to the Company’s Class A ordinary shares or ADSs.

It opened the trading session at $27.65, the shares rose to $34.66 and dropped to $26.70, the range by which the price of stock traded the whole day. The daily chart for NCTY points out that the company has recorded 386.64% gains over the past six months. However, it is still -1578.43% lower than its most recent low trading price.

If we look at the average trading volume of 4.14M shares, NCTY reached to a volume of 3286580 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here is what top equities market gurus are saying about The9 Limited [NCTY]:

JP Morgan have made an estimate for The9 Limited shares, keeping their opinion on the stock as Neutral, with their previous recommendation back on November 13, 2009. The new note on the price target was released on June 18, 2009, representing the official price target for The9 Limited stock. Previously, the target price had yet another drop from $17 to $11, while Roth Capital kept a Hold rating on NCTY stock. On January 27, 2009, analysts increased their price target for NCTY shares from 16 to 20.

The Average True Range (ATR) for The9 Limited is set at 4.11

Trading performance analysis for NCTY stock

The9 Limited [NCTY] gain into the green zone at the end of the last week, gaining into a positive trend and gaining by 85.08. With this latest performance, NCTY shares gained by 165.63% in over the last four-week period, additionally plugging by 386.64% over the last 6 months – not to mention a rise of 256.67% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for NCTY stock in for the last two-week period is set at 81.73, with the RSI for the last a single of trading hit 86.27, and the three-weeks RSI is set at 78.91 for The9 Limited [NCTY]. The present Moving Average for the last 50 days of trading for this stock 9.14, while it was recorded at 24.15 for the last single week of trading, and 6.45 for the last 200 days.

The9 Limited [NCTY]: A deeper dive into fundamental analysis

Operating Margin for any stock indicates how profitable investing would be, and The9 Limited [NCTY] shares currently have an operating margin of -38089.23 and a Gross Margin at -835.53. The9 Limited’s Net Margin is presently recorded at -55820.08.

Reflecting on the efficiency of the workforce at the company, The9 Limited [NCTY] managed to generate an average of -$452,247 per employee. Receivables Turnover for the company is 0.04 with a Total Asset Turnover recorded at a value of 0.00.The9 Limited’s liquidity data is similarly interesting compelling, with a Quick Ratio of 0.20 and a Current Ratio set at 0.20.

An analysis of insider ownership at The9 Limited [NCTY]

There are presently around $12 million, or 4.20% of NCTY stock, in the hands of institutional investors. The top three institutional holders of NCTY stocks are: CVI HOLDINGS, LLC with ownership of 219,278, which is approximately New of the company’s market cap and around 45.10% of the total institutional ownership; ANSON FUNDS MANAGEMENT LP, holding 100,865 shares of the stock with an approximate value of $3.45 million in NCTY stocks shares; and HRT FINANCIAL LP, currently with $0.66 million in NCTY stock with ownership of nearly 66.879% of the company’s market capitalization.

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Positions in The9 Limited stocks held by institutional investors increased at the end of March and at the time of the March reporting period, where 5 institutional holders increased their position in The9 Limited [NASDAQ:NCTY] by around 342,645 shares. Additionally, 6 investors decreased positions by around 35,844 shares, while 1 investors held positions by with 24,363 shares. The mentioned changes placed institutional holdings at 354,126 shares, according to the latest SEC report filing. NCTY stock had 4 new institutional investments in for a total of 334,978 shares, while 6 institutional investors sold positions of 35,844 shares during the same period.

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