BitNile Stock Is Precariously Poised for a Fall

  • BitNile (NILE) stock might seem like a cheap proxy for cryptocurrency.
  • However, NILE stock is such a consistent money loser that it’s not worth the trouble.
  • Investors should simply buy crypto if that’s what they’re interested in, instead of taking a chance on BitNile.

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Nevada-headquartered BitNile (NYSEAMERICAN:NILE) is known as a diversified holding company that mainly specializes in cryptocurrencies. It might be tempting to use NILE stock as a low-priced replacement in your account for cryptos like Bitcoin (BTC-USD). However, using it as a cryptocurrency proxy could prove to be a costly mistake.

It’s fine to want to try something new and delve into the exciting world of cryptocurrency and blockchain. Still, it’s important to pick your bets carefully, as some investments are better than others.

There are some stocks that track popular cryptocurrency tokens like Bitcoin fairly well. Suffice it to say, though, that NILE stock has recently done substantially worse than Bitcoin.

Not to be an alarmist, but an argument might be made that NILE stock is quickly heading toward zero. Even if you’re bullish on Bitcoin, this isn’t the time to take undue risks with BitNile.

NILE BitNile $0.3122

What’s Happening With NILE Stock?

Simply put, NILE stock has “bad news” written all over it. It’s one of those stocks which, reverse-split-adjusted, was very high-priced at one point but is now worth a few dimes.

Moreover, the past 12 months tell a tale of woe, as the BitNile share price has sunk from a pinnacle of $3.70 to around 30 cents. Ask yourself: Do you really want to end up holding the bag on a toxic asset like this?

Some folks might hastily decide to take a chance with NILE stock anyway. Yet, they should consider that it has done much worse over the past year than Bitcoin has.

Sure, Bitcoin’s decline from $68,000 to $30,000 was painful. But that’s much easier to handle than the carnage with BitNile shares. Even if you bought at $1 (which would be much better than $3.70), you’d still be deep underwater.

Filing Late and Failing to Profit

To be completely fair, we should check BitNile’s financials before making a final decision on it and its stock. However, the company hasn’t necessarily made it easy to do this in a timely manner.

On May 16, BitNile reported that it will be filing its quarterly Form 10-Q late. The company also did this in August 2020, November 2020, May 2021 and November 2021.

It’s not a good habit, to put it politely. What we can ascertain, at least, is that BitNile recently swung from a net earnings gain to a loss.

More specifically, BitNile’s preliminary first-quarter 2022 results indicate the company incurred a net loss of roughly $29 million. That’s a highly disappointing result compared to the net income of $2 million it reported during the prior year’s first fiscal quarter.

What You Can Do Now With NILE Stock

BitNile’s late filings aren’t a good sign, and neither is swinging from a net profit to a loss. Also, the dreadful price action of NILE stock doesn’t bode well for the company’s investors.

If you’re tempted to use BitNile shares as a replacement for Bitcoin because of the company’s crypto-market involvement, don’t be hasty. Consider its financials and NILE stock’s trajectory, and you’ll surely agree there are better crypto-focused investments out there.

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On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.