Tesla Stock – Why Ebang Holdings Stock Plummeted 29.3% in May
Shares of Ebang Holdings (NASDAQ: EBON) fell 29.3% in May, according to data from S&P Global Market Intelligence. The crypto stock pulled back amid sell-offs for the broader cryptocurrency market.
EBON data by YCharts
Comments from Tesla CEO Elon Musk suggesting that the electric vehicle (EV) company would no longer accept Bitcoin as payment for vehicles due to environmental concerns kicked off a wave of selling that dragged cryptocurrency prices lower last month. The Chinese government also indicated that it would make moves to discourage mining and to prevent certain finance-related businesses in the country from dealing in cryptocurrencies. These pressures extended to stocks with significant exposure to the crypto market, prompting steep sell-offs for Ebang in May.
Image source: Getty Images.
Ebang published a press release on May 28 in response to concerns about how the crackdown on mining operations in China might affect its business. The company stated that China’s new mining policy would have no immediate impact because its mining farm operations were already concentrated overseas.
The China-based company generally sees mining operations moving out of the country and resettling elsewhere, so it does not expect its long-term business to be seriously affected. Ebang is now accelerating the construction of mining operations in North America, Europe, and other territories. The company has also banned Chinese citizens and people within the country from accessing its crypto trading platform, bringing it into compliance with regulations.
Ebang stock has regained some ground early in June’s trading. The company’s share price is up nearly 16% in the month so far.
EBON data by YCharts
Cryptocurrency stocks have rebounded after big losses thanks to signs that Bitcoin‘s price may be stabilizing and issues related to the environmental impact of cryptocurrency mining may be ameliorated by alternative energy solutions.
Ebang stock is now down roughly 45% year to date and currently has a market capitalization of roughly $621 million. However, its stock looks like a highly speculative investment. For investors who have high risk tolerance and are looking for exposure to cryptocurrency mining and trading, the stock now trades near record lows, and gains for crypto prices could send the stock significantly higher. On the other hand, big challenges and plenty of uncertainty remain for the business, and most investors should probably view the stock with caution.
10 stocks we like better than Ebang International Holdings Inc.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Fintech Zoom Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Ebang International Holdings Inc. wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of May 11, 2021
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.