The9 Limited [NCTY] Stock trading around $20.14 per share: What’s Next?

The9 Limited [NASDAQ: NCTY] loss -12.36% or -2.84 points to close at $20.14 with a heavy trading volume of 1608186 shares. The company report on April 21, 2021 that The9 Signed a Legally Binding Term Sheet on an Investment in Skychain Technologies Inc. for Constructing Mining Facilities in Canada.

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The9 Limited (Nasdaq: NCTY) (“The9”), an established Internet company, announced that it signed a legally binding term sheet on a CAD4 million investment in Skychain Technologies Inc. (“Skychain”), a company listed in TSX Venture Exchange in Canada. The purpose of the investment is for the construction and operation of a 12 MW cryptocurrency mining facility located in Birtle, Manitoba, Canada. The9 plans to deploy its cryptocurrency mining machines in this mining facility upon completion of the construction.

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According to the term sheet, the investment consists of a convertible note of CAD2 million, which will mature in four years and can be extended for an additional one year at the discretion of The9, and a private placement of CAD2 million (the “Private Placement”). Each unit of the Private Placement consists of one common share and one share purchase warrant that entitles The9 to purchase an additional common share of Skychain for an exercise term of three years.

It opened the trading session at $23.38, the shares rose to $23.5499 and dropped to $20.11, the range by which the price of stock traded the whole day. The daily chart for NCTY points out that the company has recorded 868.27% gains over the past six months. However, it is still -887.25% lower than its most recent low trading price.

If we look at the average trading volume of 2.57M shares, NCTY reached to a volume of 1608186 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 3.80, with the Price to Sales ratio for NCTY stock in the period of the last 12 months amounting to 541.91.

Trading performance analysis for NCTY stock

The9 Limited [NCTY] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -16.01. With this latest performance, NCTY shares dropped by -40.76% in over the last four-week period, additionally plugging by 868.27% over the last 6 months – not to mention a rise of 290.76% 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 39.92, with the RSI for the last a single of trading hit 38.46, and the three-weeks RSI is set at 42.09 for The9 Limited [NCTY]. The present Moving Average for the last 50 days of trading for this stock 37.00, while it was recorded at 23.12 for the last single week of trading, and 15.65 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 -17909.40 and a Gross Margin at -30.16. The9 Limited’s Net Margin is presently recorded at +63421.40.

Reflecting on the efficiency of the workforce at the company, The9 Limited [NCTY] managed to generate an average of $1,222,833 per employee. Receivables Turnover for the company is 0.08 with a Total Asset Turnover recorded at a value of 0.01.The9 Limited’s liquidity data is similarly interesting compelling, with a Quick Ratio of 0.10 and a Current Ratio set at 0.10.

An analysis of insider ownership at The9 Limited [NCTY]

There are presently around $2 million, or 5.70% of NCTY stock, in the hands of institutional investors. The top three institutional holders of NCTY stocks are: SUSQUEHANNA FUNDAMENTAL INVESTMENTS, LLC with ownership of 50,200, which is approximately New of the company’s market cap and around 45.10% of the total institutional ownership; PALOMA PARTNERS MANAGEMENT CO, holding 37,519 shares of the stock with an approximate value of $0.76 million in NCTY stocks shares; and CUTLER GROUP LP, currently with $0.37 million in NCTY stock with ownership of nearly New of the company’s market capitalization.

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Positions in The9 Limited stocks held by institutional investors increased at the end of June and at the time of the June reporting period, where 6 institutional holders increased their position in The9 Limited [NASDAQ:NCTY] by around 120,223 shares. Additionally, 5 investors decreased positions by around 350,110 shares, while 0 investors held positions by with 350,094 shares. The mentioned changes placed institutional holdings at 120,239 shares, according to the latest SEC report filing. NCTY stock had 6 new institutional investments in for a total of 120,223 shares, while 4 institutional investors sold positions of 350,109 shares during the same period.

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