Xunlei Ltd (NASDAQ: XNET) is having a great day in the market today, trading on gains of more than 22% early on. While the stock is running, you may be hard pressed to find any reason why. The company hasn’t issued any press releases or filed anything with the SEC, but there’s good reason for the gains. Here’s what’s going on:
XNET Stock Climbs As China’s Interest In Blockchain Grows
As mentioned above, Xunlei is having a great day in the market today on no news. However, if you want to know why the stock is running, all you need to do is take a look at message boards.
Around the social investing community, we’re seeing a conversation building about China’s President Xi Jinping and his call for more investment in blockchain technology. On Friday, President Xi Jinping chaired a meeting on the subject with senior cadres.
In the meeting, the President said that blockchain would play “an important role in the next round of technological innovation and industrial transformation.” As a result of this belief, the President believes that blockchain should be made a key part of the country’s innovation ahead. In fact, he said:
Major countries are stepping up their efforts to plan the development of blockchain technology. Greater effort should be made to strengthen basic research and boost innovation capacity to help China gain an edge in the theoretical, innovative and industrial aspects of this emerging field.
Taking a look at the second quarter earnings report from XNET shows that the company is gearing up to do just that. In a statement, Mr. Lei Chen, CEO at XNET, had the following to offer:
For the second quarter, we exceeded the top end of our earnings guidance as a result of revenue growth from our cloud computing and other internet value-added services. We believe the increased demand for our shared cloud computing products and services, and expanded IaaS customer base, validated the potential of our shared cloud computing business. We will continue growing our network capacity and maintain the momentum going forward. In addition, we have accumulated extensive blockchain-related experience in both academic and industrial practice, and applied for additional blockchain patents based on our recent blockchain initiatives. As 2019 unfolds, we expect to continue to strengthen our competitive positions in shared cloud computing and blockchain and to lay a firm foundation for long-term sustainable growth.
There are a few key factors to pay attention to in this statement:
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