Crown Electrokinetics (NASDAQ: CRKN) stock is up 41% premarket this morning. We tend to think that this is just a flurry in CRKN stock. For there’s no news which justifies such a movement. Therefore we think it’s just a bout of buying triggering off a small momentum trade. And as momentum trades do we think this will tail off and then reverse. Do note that this is an opinion, not a claim made with certainty.
We’ve talked before about Crown Electrokinetics: “Crown ElektroKinetics (NASDAQ: CRKN) does have a couple of nice products which are riding the fashionable wave right now. Of course, that's not enough to guarantee financial success but it's a good start to the idea. The company - or perhaps the tech itself - is a spin out from HP. they can make glass change colour really rapidly. Think like reactolite sunglasses but in mere seconds. One market for this sort of thing is fibreoptics, which as the internet continues to roll out is a nice market. The other is in office and commercial windows - their product there might go to market later this year. OK, and there's this letter to shareholders where the CEO says he's very confident about how things are going to work out. Which is nice, given the 86% loss in the stock price in the last 12 months. Maybe this can be made back then? And so that's the 80% rise yesterday - that public announcement of confidence by the CEO.”
And, well, yes, the effect of that letter of confidence all faded away and more.
Crown Electrokinetics stock price from Google Finance.
There was also the more recent reverse stock split at Crown Electro: “It’s even possible that the company is getting sorted out. There have been several orders for fibreoptics recently. But also at CRKN: “It is true that things are happening to CRKN stock but we tend to doubt they’re going to be all that value adding. For the next event is the annual general meeting, where they’re going to issue some more stock, then issue some more stock, then ask for permission to issue some more stock. Those three not usually known to be particularly value additive.” They need to recapitalise. So we’d not expect any consistent rise in the price just yet. Crown Electro might even come good, that’s certainly possible, but we’d think of them as a work in progress as yet.”
We’d need to see good and hard evidence before we believed that CRKN stock was going through a revaluation rather than just another speculative flurry. In the absence of that evidence we’re sticking with the idea that this is indeed just one of those flurries.