Technology

The9 Limited (ADR) (NASDAQ:NCTY) Volumes Explode

The9 Limited (ADR) (NASDAQ:NCTY)

The9 Limited (ADR) (NASDAQ:NCTY) shares have traded over 1.1 million times today and is down 2.8%. NCTY shares have a posted daily average volume of just 28,500. It has been a long, persistent fall for a company that was projected by analysts, in 2007, to reach $42 per share.

The9 Limited (ADR) (NASDAQ:NCTY)

The9 Limited (ADR) (NASDAQ:NCTY) is a Chinese online game developer and operator. The9 develops and/or operates, its proprietary mobile games and web games, including the CrossFire brand new shooting mobile game, Audition mobile, Knight Forever, Q Jiang San Guo and Wildlands God of War.

Deal Terms

Today the company announced that its subsidiary has signed an exclusive publishing agreement with Alibaba Games’ subsidiary. The agreement grants Alibaba Games’ subsidiary an exclusive right to publish its proprietary CrossFire brand new shooting mobile game in China. The9 Limited’s subsidiary developed the CrossFire brand new shooting mobile game using the CrossFire intellectual property licensed from Smilegate Entertainment, Inc.

The9 Limited’s also signed a settlement agreement with Smilegate Entertainment, Inc. to terminate the license of CrossFire 2. Under the settlement agreement, The9 Limited will receive cash refund of the previous upfront license fee payment from Smilegate Entertainment, Inc.

NCTY Stock Performance

By the end of 2009, NCTY stock was trading under $10. By 2016, the stock was having trouble staying above $2, and for all of 2017 the psychologically important $1 level has been a challenge.

Shares of The9 Limited (ADR) (NASDAQ:NCTY) are down 45% for the year and down 6% for the past month. Importantly, the latest financial reports put the games developer’s cash-per-share value at just $0.10.

In the gaming market, it is not unusual to burn through a large amount of cash at a fast rate. Talented developers are known to be very expensive and that does not include the expense of testing and debugging their work product.

In 2016, NCTY shareholders lost (-$4.27) per share on sales of $.8.5 million.

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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