TKAT Stock: Here’s Why Takung Art Is Flying

Takung Art Co Ltd (NYSEAMERICAN: TKAT) is screaming for the top in the market this morning. However, if you’re looking for a press release or SEC filing, you’re going to have a hard time. The company has released no news! 

So, what’s the deal?

The gains seem to be the result of investors looking for another opportunity to realize the type of gains that we’re seeing out of Oriental Culture Holdings Ltd (NASDAQ: OCG) sending TKAT stock on a sympathy run for the top. Here’s what’s going on:

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Dramatic Gains in OCG Send TKAT Stock for the Top

As mentioned above, Takung Art stock is flying in the market this morning, gaining more than 40% early on. But with no news, many are wondering why. 

Without news, anything I say here is speculation. However, I believe I’ve found the reason for the run. 

Yesterday, Oriental Culture Holdings, another Chinese company that focuses on art, launched its IPO at $4 per share. By the close of the trading session, the stock had climbed to $6.10 per share, and in the after-hours and premarket sessions, more gains were realized. 

Oftentimes in the stock market, we see a dramatic run in one stock, and when investors realize that the run is likely coming to an end soon, they look for similar opportunities. That seems to be what’s driving the gains in TKAT stock this morning. 

A Biden Presidency Is a Great Thing for Takung Art

Moving forward, there may be good reasons to be excited about TKAT stock. That’s especially the case when you think about the fact that Donald Trump will be leaving the Oval Office, being replaced by Joe Biden. 

Throughout his presidency, Donald Trump has been in negotiations with China, surrounding trade between the two companies. This process has been so touchy that the term Trade War was coined to describe it. 

Under the Trade War, China and the United States have been going back and forth with tariffs, taking jabs at each other and leading to economic pain for China. 

This may change soon. 

Joe Biden is essentially the opposite of Donald Trump. As a result, many investors believe that Biden will reverse what Trump has done in the Trade War with China. Should that be the case, it will be great news for TKAT stock as well as any other Chinese stock. 

Afterall, if the Biden Administration rolls back the changes to international trade made by the Trump Administration, Chinese companies will benefit from stronger demand for their products from the United States. 

All in all, this will result in an improved economy in China, creating an opportunity for strong potential growth among companies across the region. 

With Takung Art being a Chinese company, the company will be a natural beneficiary of a Joe Biden presidency. 

Risks to Consider Before Buying TKAT Stock

Any time you decide to make an investment, you’re accepting risk. After all, any chance to produce gains comes with the potential to realize losses. An investment in TKAT stock is no different. Before diving in, investors should consider the following, potentially significant, risks:

  • Speculation. The run that we’ve seen across Chinese stocks has a lot to do with speculation with regard to what the Biden Administration will do in terms of global trade. At this stage, we have no idea what that’s going to be or the effect it will have on the Chinese economy. If the stars don’t align right, and investor expectations are missed with regard to the end of the Trade War and resulting Chinese economic growth, we could see declines across the region, including in TKAT stock. 
  • Penny Stock Risk. TKAT is a penny stock and is exposed to all the risks that investors think about when it comes to stocks in this category. High levels of volatility, lack of profitability, and a relatively unproven business model all have the potential to lead the company into significant losses. 
  • Art Is Tough. Art is a very hard business to be in. Not only is the business cyclical art values are highly volatile. As such investing in and building a business around art exposes the investor to economic risks, volatility risks, and the risk that art pieces will lose favor within the art community. 

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Final Thoughts

All in all, the run in the value of TKAT stock is an interesting one. While the company hasn’t issued any news, excitement following an overwhelmingly successful IPO from OCG is leading to FOMO in Chinese art stocks. 

With an ultra-tiny float of under 6 million shares, it doesn’t take much to send the stock for the top. So, the excitement started the gains, squeezed the shorts, and led to incredible volume and price appreciation. There may be plenty more room left in the TKAT run ahead.