Veritone Inc VERI 13.79% stock dipped another 7 percent on Tuesday and is now down more than 60 percent from its all-time high in less than a month. Veritone’s volatility has been incredible since a Barron’s article triggered a buying spree back in August, and traders are now trying to determine if the stock will find a bottom any time soon.
After a mostly under-the-radar IPO back in May, Veritone stock drifted mostly lower on relatively low volume during its first three months on the market. On Aug. 18, tech trader Tiernan Ray wrote an article for Barron’s in which he described Veritone as a rare, well-position artificial intelligence pure-play stock.
Barron’s Bump
The article sparked an epic rally in the thinly-traded stock. In fact, from Aug. 18 through Sept. 26, Veritone stock skyrocketed an astounding 735.5 percent from under $8 per share to as high as $74.92.
The huge move was enough to capture the attention of notorious short seller and Citron Research executive editor Andrew Left. On Sept. 27, Left tweeted that Veritone is “not artificial intelligence, more like natural stupidity.”
Left nearly pegged the top to the very day, and Veritone’s stock has since plummeted nearly 55 percent.
There was little fundamental justification for a 700 percent-plus gain in a matter of months, so Veritone bulls shouldn’t be surprised that a new deal with iHeart Media announced on Oct. 2 barely moved the stock. Veritone signed a two-year deal to provide AI solutions for 200 of iHeart Media’s stations.
How Low Can It Go?
At this point, the primary focus for traders is where Veritone may find support. The stock is within a stone’s throw of its 50-day simple moving average at around $28. Left’s $20 target could also provide a psychological support level for the stock. Below $20, the $15 IPO price is the next reasonable potential support level.
The next fundamental catalyst for the stock will likely be…
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