Visionary Education Technology Holdings Group (NASDAQ: VEDU) is in the Canadian private education market. Online and so on for high school, degrees and vocational training. An entirely sensible market to be in but not one, we would think, subject to massive changes. It's not like the same market in China where government changes in the rules can kill stock prices overnight. It's also true that VEDU stock is up 77% this morning and no, we don't quite see this. There's no company specific news announced, there's nothing from government on changes in the market rules, nor any grand contracts on offer.
So, it's necessary to try and think through why there might be this price chance here. Our best guess - and we'd say it's a pretty good one too - is that this is a little bit of market manipulation - or speculation, to be less accusatory - that is going to fade away as the day progresses. That conclusion coming partly from the absence of any other news, partly from the simple shape of this price chart:
Visionary Education Technology Holdings Group stock price from NASDAQ
We look at that price chart and think ah, yes, we can see the pattern here. Note that this is not chartism, with weird claims about double collars and so on. Rather, this is a deep - and cynical, because we're realists - evaluation of human behaviour.
When a stock price leaps at the very open of the premarket then we're always very suspicious. Simply because trade at that point of the day is very thin indeed. We've seen stock prices moved 50% and more simply by one trade of a handful of shares - seriously, at the right time $30 worth of trades can move a price significantly. As we've also observed such price moves don't remain as the markets become more liquid - or perhaps as everyone wakes up.
So, we don't say this with certainty, just with a high degree of confidence. The reason for the VEDU stock price leaping 77% at our pixel time is that it rose much more than that right at the open of the premarket. Someone playing games with the price at that point. An effect that is fading and will continue to fade as the market fully open.
