Alliance Entertainment (NASDAQ: AENT) stock is down 60% premarket. This is ridiculous, there’s nothing out there causing AENT stock to drop like that. Except, obviously, the fact that the ticker says it has just dropped like that. The reason here is a couple of tiny trades done at entirely ludicrous prices. This does happen sometimes in less liquid stocks. And when it does it-s an opportunity for us to make hay.
OK, yes, there is risk here, this is not something to bet the farm upon. But it is something that could be described as a sensible speculation. As to what’s done at Alliance: “Alliance Entertainment Holding Corporation operates as a wholesaler, distributor, and e-commerce provider for the entertainment industry worldwide. The company offers gaming products, vinyl records, digital video discs and blu-rays, compact discs, and consumer products and collectibles. It also provides third party logistics products and services. The company distributes its physical media, entertainment products, hardware, and accessories through multi-channel strategy.”
OK, but this isn’t something we’d expect to drop 60% in a day. At least not unless they’d just published terrible accounts or something but they haven’t.
What has happened is this:
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Allied Entertainment stock price from Nasdaq
And that really is all that has happened. Last night’s close was at $1.17. So far today there have been two trades, of three shares in total, at those ridiculous prices. And that’s enough to pull the ticker down. What’s going to happen here as the adults get into work is that the price will rise back up. To something close to last night’s close.
The trading option for us is of course to fill out boots. Assuming that we can find anyone at all to sell to us at these low, low, prices. Worth trying, although it’s doubtful if there will more than a few hundred pieces of stock available at these prices. But, you know, if there are it should be us that own them, right?
This is all entirely nothing to do with the record distribution business, or with Allied Entertainment itself. Someone’s been playing around with the pricing of AENT stock. If we can trade at this ridiculous price then we should, in whatever volume we can. For our best guess here is that it’ll be well over $1 by lunchtime, if not before.
