- The stock price of The9 Limited (NASDAQ: NCTY) increased by over 9% pre-market. This is why it happened.
The stock price of The9 Limited (NASDAQ: NCTY) increased by over 9% pre-market. There are not any company-specific reports driving the stock price up today so it appears there are external factors at play.
Investors in stock trading platforms are citing the momentum in cryptocurrencies as being the driving force for the stock price increase. The price of the Bitcoin cryptocurrency is up more than 9% over the past week. And Ethereum is up more than 12% over the past week.
Earlier this month, The9 Limited announced that its wholly-owned subsidiary NBTC Limited and Kazakhstan enterprise KazDigital Ltd have signed a non-binding term sheet regarding the establishment of a joint venture company in Kazakhstan to build a cryptocurrency mining site with a capacity of 100MW. And it will be used to deploy The9’s mining machines and potentially other third-parties’ mining machines.
According to the term sheet, both parties are going to invest their own assets to establish the joint venture. And KazDigital will invest assets related to construction and infrastructure of the mining site into the joint venture and The9 will invest cash or mining machines in the joint venture. The assets invested by both parties are going to be evaluated by a third-party impartial institution in order to confirm their fair value and ensure that both parties invest equivalent assets.
After the establishment of the joint venture, construction of the total capacity of the cryptomining site will be completed in four stages: first stage of 25MW has been completed on August 1 this year, the remaining 75MW will be gradually completed in the third and fourth quarters of this year and the first quarter of 2022, with installation of 25MW per quarter. KazDigital is going to be responsible for future operation and management of the joint venture. And it will also be responsible for submitting relevant reports to The9. The9 is going to first transport 1,000 mining machines to Kazakhstan for trial operation to ensure streamline processes and operations in the future.
Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.