This stock has made a really good move since the beginning of May.
But this looks like an obvious phony pump to me.
I assume the rally is based on their recent announcement of the formation of a wholly own corporation called Applied Digital Cloud Corporation.
Apparently their strategy is to build giant data centers to tap into the massive need for High Performance Computing to support A.I. Well that is a great plan on the face of it. And there are lots of players moving in the same direction.
Do they own the land needed to build the infrastructure? They are going to need a lot of power and the lead time on those giant transformers is more than a year and getting longer. Then they need to purchase the computer hardware. The top-of-the-line Nvidia units are selling for more than $40K each and they are going to need tens of thousands of them.
So where will they get the money? They are going to need more than a Billion dollars to pull this off and it is going to take about two years to complete the plan, BEFORE they can make any income. And will they be competitive with the major players, like AWS, Google, Microsoft, and dozens of other players?
So where are they going to get the money? I know they are not a player in the Bitcoin Mining biz. Will they sell more shares? Or maybe borrow the money?
Given the upfront cost and the competition I don't think the prospects for success look very good at all.
I think this is just a phony move to pump the price of the stock so the insiders can either sell the company or exit with a Golden Parachute. And it looks like they have succeeded in that.
As a shareholder, I really don't like the look of this at all. This is just my opinion.
Good Luck to All Longs.
