This week, a positive gain was observed for shares of Chinese social networking site Momo Inc (MOMO). There was no news of any kind from Momo, but volumes of shares increased. Why did investors pay attention to it?
Momo dropped by almost 60% in the past year due to the Chinese economy’s slowdown, putting pressure on shares. While investors’ attention to the company’s shares cannot be attributed directly to real progress, some positive expectations can be attributed.
A consequence of the outbreak of COVID-19 in certain regions in China has led to some restrictions being implemented. Investors believe a ban on social life could lead to increased interest in communicating via the Internet. Momo is more than just a social networking site. It is also a dating service.
The famous options trader John Najarian (Jon Najarian) mentioned his positions in Momo Inc (MOMO) during a program on American television and said there was “unusual activity” with regards to these shares. Last week, several analysts thought Momo’s stock would rise to $15.5 a share in the near term. At the trade on January 12, the stock reached that level.
As a social network, Momo launched an online dating site based on users’ interests and location. Additionally, Momo has the standard social media features such as finding friends, subscribing to groups, and interacting via messengers. Typically, Momo is accessed on a mobile device so that users can take and share photos and videos. This convenient and fast method of exchanging content is one of the main reasons why Momo is becoming so popular. One of the most popular options on the platform is live videos, which generate the bulk of the revenue.
Momo Inc (MOMO) will release its next financial report only at the end of March. Investors are therefore not interested in the upcoming presentation of the quarter’s results at present. Possibly, we’ll see another uptick in volatile stocks. Despite this, the fact remains that Momo is extremely popular in China. Online dating is an expanding industry, so the company can expect to retain its audience’s attention. MOMO’s stock was worth $16.11 at the close of trading on January 13.