Chinese company plunges on Nasdaq after announcing purchase of TrumpCoin and Bitcoin

Addentax Group Corp (ATXG), listed on Nasdaq, saw its shares drop 12.6% on May 16, priced at US$ 0.59, after announcing an investment plan in cryptocurrencies, including the controversial TrumpCoin. Since 2022, the stocks have accumulated a decline of 99%.

The company, based in China and focused on the textile sector, informed the SEC of its intention to allocate up to US$ 800 million in digital assets, including up to 8,000 bitcoins, as well as altcoins and memecoins. The proposal, according to CEO Hong Zhida, is to insert the company into the crypto ecosystem as part of a long-term strategy based on liquidity and institutional interest.

The market, however, reacted with skepticism. The inclusion of TrumpCoin in the portfolio generated distrust regarding the seriousness of the initiative. Unlike bitcoin, which attracts institutional support and is adopted by companies like MicroStrategy and, more recently, Méliuz, memecoins are seen as speculative and unstable assets.

Experts point out that an exclusive focus on bitcoin tends to be more well-received by investors. The negative reaction to Addentax's strategy may become an example of the risks associated with diversification in digital assets without clear fundamentals.