EFUT:
A Bit of Speculative Excess
By Rev Shark
RealMoney.com Contributor
11/14/2006 2:57 PM EST
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We have a positive but pretty quiet day, with nothing major going on. The bulls still have the wind at their backs and are holding things up. The buyers seem to be aggressive at times but a little skittish as they debate whether to chase some of these stocks that have made tremendous moves.
One stock of particular interest today is eFuture (EFUT). This stock was at 11 a week ago and is trading up 18.50 points to 48 at present, which is a market cap of about $120 million. The stock is a China-based software company that has revenue of about $5 million.
Obviously this stock is not trading on fundamentals. It is a massive short squeeze/momentum play. What is interesting is that I can't recall seeing a move of this magnitude since the bubble days, when things like Ktel Records and Egghead Software went nuts in a similar fashion.
Given the unrelenting rally we have had over the last few months, it shouldn't be a big surprise that we have a stock acting like EFUT. However, it is an indication of some very aggressive speculative excess. Traders are playing EFUT because they are confident that someone else is going to come along and pay even more for it.
It's the stock market equivalent of a Ponzi scheme and it will, absolutely, positively, end badly. But it can go to unimaginable levels in the interim.
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