Back on December 19, I reported that ChinaCache International Holdings Ltd. (NASDAQ:CCIH) had seen a whopping near 200% increase in its stock. At the time, there was little going on with the company that might have caused this huge spike, but I speculated that it might have something to do with the fact that ChinaCache had been granted a CDN license a few months earlier by the Chinese government, making ChinaCache one of the few Internet content provider companies legally entitled to operate in the country.
Now that it’s January, the time when the Chinese government said it would be pulling the plug on all those companies without a proper CDN license, I thought I would check back in on ChinaCache and see how it was doing.
At the time of writing, ChinaCache’s stock is trading at $2.13, which puts it up $0.28, or 15%, from the previous closing price of $1.85. This puts it just under $1 short of where it was at back on December 19, but still over $1 from where it was on the day prior that month. To put things a little more into perspective, the 52-week range for the stock falls between $0.72 and $3.16.
Given that the company hasn’t made any grand announcements recently, save for producing the financial results of its first six months of 2017 (which came out way back on December 21), I would posit that the company’s current stock increase is a result, if perhaps indirectly, of the ban of non-certified CDN companies recently enacted in China. There used to be a lot of companies like ChinaCache in China, those that provided the cached version of websites to users to make data acquisition faster (a common practice), but very few received actual licenses to do so, ChinaCache being among the few that did. So, essentially, a lot of ChinaCache’s competition would have been eliminated with this ban, which might explain the growth of the company’s stock.
Featured Image: twitter
