“A 75% Crash in Just an Hour: Is It a Chance or a Trap?”

On the 6th of this month, AirNet Technology, a NASDAQ-listed company, experienced a staggering 75% drop in its stock price within just one hour

AirNet Technology's stock plummeted 75% in just one hour, demonstrating the volatile nature of certain investments. This dramatic drop highlights the risks associated with speculative trading and the consequences of "blind" investing in the stock market.

On the 6th of this month, AirNet Technology, a NASDAQ-listed company, experienced a staggering 75% drop in its stock price within just one hour. The stock, which had reached a 52-week high of $2.90, plummeted to a 52-week low of $0.38 before closing the day with an 81.46% decline. At one point during trading, the stock's drop exceeded 86%.

AirNet Technology, a penny stock, had been on the rise since the end of last month. Despite the lack of significant news or events, its share price tripled in just eight trading days, attracting speculative investors. However, the rapid increase was followed by an equally swift and severe decline.

Personal investor A, who invested 5 million won, found himself with over half of his investment lost. Describing himself as a "retail investor who likes to jump on NASDAQ surges," A expressed frustration, noting that despite believing the stock was at its low point and investing accordingly, he still faced significant losses.

In South Korea, there has been a steady increase in investors engaging in "blind" investment in foreign stocks. This approach mirrors the stock market adage "ride the running horse," where investors buy into rapidly rising stocks or anticipate rebounds in severely falling ones, hoping to profit from short-term movements. Some fall victim to investment schemes impersonating experts, while others make decisions based on the dramatic ups and downs of stock prices.

Recently, many foreign stocks heavily bought by Korean investors have experienced sharp declines, leading to substantial losses. These stocks are often Chinese companies listed on exchanges like Hong Kong or the U.S., known for their extreme price swings within short periods without any fundamental news.

AirNet Technology exemplifies such risky investment behavior. Originally listed in 2007 through American Depositary Receipts (ADR), the company is based in Beijing and operates in travel advertising and cryptocurrency mining. Despite these sectors, the company faced a 68% revenue drop last year and a net loss of $57,400. The stock price, once around $300, fell to under $2, representing a 99% decrease. The trading volume has been low, and despite a rights issue in June, the stock's volatility persisted.

Following the dramatic 81% drop in a single day, some Korean investors, like A, reportedly sought to capitalize on a potential rebound. Posts on domestic stock discussion forums reflected frustration and disillusionment, with comments like "chased the bottom and failed" and "thought it was the bottom but found hell instead."

The end of speculative "blind" investing often brings regret. A noted that AirNet Technology's volatility resembled that of Hong Kong-listed Longhui International, saying, "Stocks that surge without reason often fall just as quickly. It's like gambling—huge profits can be made in a minute, but there's a deep abyss underneath. I hope other investors recognize this."

Warnings about the need for caution in foreign stock investments are increasing. A financial regulator noted, "Investors seem to be shifting their focus to less regulated areas like cryptocurrencies or foreign stock markets. Sometimes, those who see themselves as good investors can inadvertently disrupt these markets. It's essential to maintain vigilance if you're not investing based on the intrinsic value of a company."

The dramatic decline in AirNet Technology's stock serves as a cautionary tale for investors engaging in speculative trading. While the allure of quick profits can be tempting, it is crucial to approach investments, especially in volatile markets, with a clear understanding and caution. Investors are advised to thoroughly evaluate the fundamental value of their investments and avoid being swayed by short-term price movements.