Addentax (NASDAQ: ATXG) stock is down 8% so far on Friday on a 920% rise in the stock price. Yes, we know that seems odd but it is also entirely and wholly true. Sometimes the world works in mysterious ways. The clue required here is that nominal and real prices are not the same thing. Even, they can move in opposite ways at the same time.
Addentax itself does: “Addentax Group Corp., together with its subsidiaries, operates as a logistic service provider in the People's Republic of China and the United States. It operates through four segments: Garment Manufacturing, Logistics Services, Property Management and Subleasing, and Epidemic Prevention Supplies.” So, shipping PPE around and with the garments thing we presume that it didn't win the Shein contract - if it had we'd expect rather more volume to be flowing through the accounts.
The Addentax problem is that it seems not to be very good at doing these things. The stock is down 40% this year and some 90% over the past 12 months (ignoring an insane surge to a split adjusted $6,000 at one point). This, in turn, then produces a problem, for the NASDAQ quotation could be lost
Addentax stock price from NASDAQ
Note that that chart is already split adjusted. The losing price was 72 cents on Thursday, the price on Friday is $6,50 or so. Which is to explain how we've got our two prices moving in different directions.
The US markets think that penny stocks are not respectable. Therefore you cannot stay on the main exchanges - NASDAQ, NYSE - if you're a penny stock. Something must be done is business performance means that you become worth less than $1. The thing to be done is the reservse stock split. Which is what Addentax has just done, a 10 for 1. The stock price should then, mechanically, rise by 1,000%. But, as we can see, it has risen by 920%. So, that's an 8% real price fall, a 920% nominal price rise. Or, given the different timings NASDAQ itself is using, a 10% real fall.
As we said at the start it's entirely possible for a stock price to rise and also to fall at the same time. It's just that it will be the real and nominal prices moving in different directions.
