Sports lottery operator 500.com calms investors after stock tanks

Chinese online sports lottery operator 500.com is trying to reassure investors that it’s business as usual after a sharp selloff of its stock.

On Monday, 500.com shares fell more than one-quarter to close at $12.23. The shares rebounded somewhat on Tuesday, currently sitting up about 10% to $13.47, but precisely why investors fled for the exits on Monday remains a mystery.

500.com is set to report its Q3 results on Thursday but the company felt compelled to issue a statement on Tuesday “affirming normal operation of its business.” The phrase is somewhat misleading, given that the company has reported nil sports lottery revenue since March 2015, when Beijing ordered a ‘temporary’ suspension of online sales following allegations of widespread corruption by provincial lottery administrators.

500.com attempted to diversify its revenue streams through last December’s acquisition of a majority stake in online payment processor Sumpay.cn, only to unload its new acquisition this spring. 500.com reported revenue of only $200k in its Q2 report, most of which came via Sumpay.