Advanced Battery Technologies, Inc.(OTCMKTS:ABAT) Ascent Ends In Crash

Advanced Battery Technologies, Inc. (OTCMKTS:ABAT) dropped 17.05% on Friday, once the battery hype lost some of its momentum.

ABAT skyrocketed in the on Feb. 28, jumping more than 120% over the course of four sessions and closing at $0.88 on record volumes. Although the ascent was spectacular, it was quite obvious that it couldn’t last for very long. Indeed, the ticker dropped as low as $0.42 before stabilizing at $0.72 by the end of Friday’s session.

The red flags surrounding ABAT are unmistakable for any trader that does any due diligence. First off – it is a Chinese company, whose financial filings are virtually non-existent. Research on ABAT is hindered by the company’s inexplicable and erratic behavior, lack of press releases and media coverage, as well as the silence of its officials. The fact that traders pretty much have to bet blindly when dealing with ABAT can quell even the most enthusiastic investor.

Another reason for the fall is the fact that ABAT had been propelled up the charts by news of events that do not really benefit it. The announcement that Tesla Motors, Inc. (NASDAQ:TSLA) is building a new production facility in the US pushed all lithium-related tickers up tremendously, and ABAT was sort of swept up with the others. Now that the hype is cooling down somewhat, investors are starting to realize that the news may have drawn attention to the company, but it is in fact not beneficial for it.

Other lithium companies, like Lithium Exploration Group, Inc. (OTCMKTS:LEXG) and Amerilithium, Cor. (OTCMKTS:AMEL) may potentially profit from the TSLA facility, if they are commissioned to supply it. However, for ABAT‘s point of view, this project will seriously bolster one of its major competitors for the US market.