Insightful analysis and commentary for the US and global equity investor
Contributors: Douglas McIntyre Jon C. Ogg

Previous Posts

Wednesday, November 15, 2006

Looking at the e-Future Information Technology (EFUT) Exponential Gains & Trading Volume Spike

Stock Ticker: EFUT

The explosion in trading volume in Chinese micro-cap stock E-Future Information Technology (EFUT) has been mind-boggling. This was one of the stealth IPO's of only 1.1335 million shares that priced at $6.00. Here are the most recent closing prices with trading volume:

14-Nov-06 $43.60 14,254,600
13-Nov-06 $29.49 3,182,800
10-Nov-06 $19.89 1,755,700
9-Nov-06 $14.28 634,700 (opened at $11.00)

e-Future is the first Chinese software company listed in NASDAQ CAPITAL MARKET, and also the first software company in the front supply chain market. The underwriter was also an unknown firm called Anderson & Strudwick, Inc.

The company just made a press release yesterday before the open that they knew of no reason for the exponential performance. It said it has actually issued 2.6+ million ordinary shares to date.

Since October 30, 2006, the share price and trading volume of e-Future's ordinary shares has increased dramatically. On several trading days, e-Future's trading volume has been a multiple of its total outstanding ordinary shares. Yesterday's summary: e-Future is unaware of any business information underlying the increase in e-Future's per share price and trading volume.

Being a logistical supply chain software company in China obviously has its perks, but these strange performing IPO's can be a bit scary after many companies start showing their results. We aren't saying this is a sham, but these situations more often than not end up correcting themselves in time. This seems to be a classic thin volume explosion that turns into a mega-volume trading stock that is touted by many chat rooms and the day traders play the volume on the momentum alone.

EFUT shares are trading down 8% at $40.00 pre-market, but that is after closing up over $14.00 higher than the $29.49 close on Monday.

Jon C. Ogg
November 15, 2006

Powered by Blogger