Qutoutiao stock price rotates lower to erase yesterday's gains

Qutoutiao Inc (QTT.US) stock jumped 61% higher yesterday. Initially there was no official news behind  the surge in the stock of the Shanghai-based mobile entertainment firm and some traders believe that short squeeze was the likely reason behind the jump. Yesterday the trading volume for Qutoutiao amounted to 119.96 million shares, whereas the average volume stands at 2.13 million. Qutoutiao shares reached the highest level since March despite the fact that the company is still dealing with blowback from the accusation by Chinese state television (China Central Television, or CCTV). Back in July, Qutoutiao was accused of selling suspicious ads with false information at an awards show.

Later Sina Finance announced that Qutoutiao published an internal letter according to which company reportedly achieved an operating profit in Q4 of last year. If this rumor turned out to be true, then it would mean that Qutoutiao achieved a profit for the first time since it went public. This news spread quickly among investors via social media and many swing traders began to take large positions.