SGOCO Group, Ltd. (SGOC) stock prices were up by an astounding 279.46% as of the market closing on July 9th, 2021, bringing the price per share up to USD$9.79. Subsequent premarket fluctuations have seen the stock surge by 44.02%, bringing it up to USD$14.10.
SGOC manufactures a variety of offerings, primarily phase change storage systems. Consisting of a number of businesses based in Hong Kong, SGOC focuses on VR technology, energy saving technology, mortgage lending, property investment, and a host of other growth segments across various markets. The company is continuously allocating resources towards the building of an ecosystem of sustainable growth that results in healthy gains in shareholder value.
The penny stock company is based in Hong Kong, with a market cap in excess of USD$1 billion. This is despite the company reporting only USD$4 million in revenue for 2020, ultimately proving itself to be unprofitable at the moment. The company also reported a liquidity position of USD$3 million, indicating a balance sheet that does not reflect its inflated market cap.
SGOC as the Latest Meme Stock
The company’s stock has recently skyrocketed by more than an astounding 500%. This is despite an apparent absence of significant news about the company or changes in SGOC fundamentals. Without proper contextualization, it seems possible that SGOC has become the latest target of the meme stock phenomenon that has swept through the market . This is reflected by the jump from an average 10-day trading volume of company stock in the amount of 664,000 to more than 100 million.
SGOC Short Interest
The meme stock phenomenon is driven by retail investors who target underdog companies in order to execute a coordinated short squeeze. Historically, meme stocks have exhibited a high short interest, which is not the case with SGOC. The company indicated a short interest level of 8%, casting doubt on its status as a meme stock. Nevertheless, data from Fintel reports a short volume ration of more than 25%. Even if the growth is not driven by the meme stock phenomenon, the limited evidence available does suggest the influence of momentum and day traders.
Future Outlook for SGOC
Refusing to look a gift horse in its mouth, SGOC is poised to capitalize on the expanded opportunities afforded to it in light of its recent explosion of equity value. Despite the inherent risk and volatility associated with meme stocks, the company is keen to allocate resources towards maintaining its trajectory of fortuitous success by ushering in more organic growth moving forward.