Micro-cap stocks can be a lot of fun. Sometimes you just don’t know what to expect, and pivots can be frequent — often accompanied by a big movement in share prices. Prices are cheap, so investors’ exposure is low. Case in point, Color Star Technology Co Ltd (NASDAQ:CSCW) stock.
In the space of roughly one year, the company has gone from a ready-mix concrete distributor to a “dedicated education services provider,” to an entertainment technology company. Big movement in CSCW stock in 2021 has been tied to yet another new line of business being added to the mix: NFTs.
Color Star Technology offers everything you could hope for in a micro-cap stock. Excitement, drama, cheap shares and the potential for big gains. CSCW was a penny stock coming into 2021, but posted a single-day gain of 36% at the end of March — part of a two-week run that saw shares pop 122%.
Why Has CSCW Stock Been on the Move in 2021?
The current Color Star Technology story starts last May. Many businesses were forced to evolve because of the coronavirus pandemic. Color Star Technology chose to completely reinvent itself. The company changed its name (it was formerly known as Huitao Technology Co) and made the leap from supplying ready-mix concrete to becoming an online and offline education services provider.
At the time the company’s CEO noted: “[The] name change to Color Star Technology and completion of deposition of concrete business is the major milestone. Now that we have completed our business transformation to an innovative education provider, we are excited to focus on education services development.”
2020 saw dramatic rises and drops for CSCW stock. The company announced numerous pushes into digital entertainment, including online streaming concerts. It also decided to get into the creation of offline music festivals, banking on pent-up demand after the pandemic canceled live music. Naturally, the stock was on the receiving end of the Reddit effect at times, amplifying the CSCW movement.
This March, CSCW stock was once again making headlines after a burst of activity. This culminated with the March 30 announcement that the company would be developing NFTs for partners in its many lines of business, including celebrity entertainment content, online concerts and online museum collections. News of the NFT move saw CSCW stock close at $1.82, a 12-month high.
What Is the Fuss Over NFTs?
NFTs — or non-fungible tokens — have turned into the 2021 “it” item. These are unique, digital items that have their authenticity protected through use of blockchain. Most NFTs are works of art, like the “The First 5,000 Days” image montage by Beeple that recently sold for $69.3 million. However, virtually anything digital can be sold as an NFT.
Owning an NFT doesn’t mean you have the only copy. On the contrary, there can be virtually unlimited numbers of 100% perfect copies floating around out there. But the buyer has bragging rights for owning the original. Unless the blockchain gets hacked (MIT says it can happen), or a technical issue results in it being lost.
NFTs are a craze. To me, it feels more than a little like a bubble, but at this point it’s showing no signs of slowing down. If you’re interested, here’s a list of NFT-related stocks to keep an eye on from InvestorPlace’s Sarah Smith. And yes, CSCW stock is on that list.
Bottom Line on CSCW Stock
Color Star Technology is a Portfolio Grader ‘B’ rated stock that’s worth thinking about. Especially now that CSCW stock is down from its March high. If you have any interest in NFTs, CSCW offers an inexpensive option to invest in this high-risk, high-reward trend. And if NFTs end up being a dead end, Color Star Technology is involved in other lines of business like online concerts.
Even if all of these opportunities fail to pan out in the long term, Color Star Technology has proven to be resilient, if nothing else. You can bet the company’s founders are eying the next big trend to jump on board with. And one of these times, one of those bets may just pay off for those who bought CSCW stock.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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