SOS Limited (SOS), a tech company that focuses on emergency rescue services, has broadened its strategy to focus on cryptocurrency mining The action is on the Many investors’ radar both because of its rise in short interest and allegations of fraud Why is SOS stock rising and should you buy it now?
SOS stock has caught the interest of investors seeking exposure to Bitcoin mining stocks or alternatives to Riot Blockchain (RIOT), Marathon Digital (MARA), Hut 8 Mining (HUTMF) and Bitfarms (BFARF)
On April 6, SOS stock fell 6% to $ 4.50 but then jumped over 30% in extended hours to $ 5.90 Many other crypto mining stocks fell that day, RIOT , MARA and HUTMF dropping 5, 73 and 74 percent, respectively
The increase in SOS stock may be due to a Reddit campaign seeking to make it the next GameStop (GME) Reddit investors have noted that short interest in the stock has increased and plan to make a short squeeze over the next few days to get the stock above $ 15 Their GameStop compression increased the stock by over 2000% and saw many retail investors make huge gains
In February 2021, Hindenburg Research published a report alleging that SOS Limited was a fraud, indicating that the company was using a fake corporate address Hindenburg then revealed a short position in SOS stock
The fraud allegations sparked a rush to sell SOS shares, which brought down Hindenburg is the same investor who alleged fraud at Tesla competitor Nikola, which prompted its founder and chairman Trevor Milton to resign and GM to reduce partnership with the company
We’re running out of $ SOS, which we believe to be an obvious China-based shell game reviving the corpse of an old China-based company that imploded 90% from its highs We believe SOS is $ 0 and poses significant regulatory risk imageTwittercom / BKyCHINHIE
We found out that the $ SOS head office and head office does not appear to exist.We visited the address given in the company’s filings with the SEC and found out that it was a hotel A woman who worked for the hotel told us that there was “no business here” imageTwittercom / 64cBK1PcOU
Hindenburg also alleged that PSPC King Chamath Palihapitiya misled investors into the Clover Health Agreement (CLOV), claiming that Clover never disclosed its insider trading and regulatory investigations on its practices CLOV stock dropped on claims
SOS Limited has denied Hindenburg’s fraud allegations, but that hasn’t helped its stock: it’s over 70% below its recent peak Plus, it’s overvalued, at a multiple of the reservation price of 155 That’s more than Riot 117 and Marathon’s 138
Before switching to cryptocurrency mining, China-based SOS was in the online lending industry, with a model similar to LendingClub. The company’s data analytics services currently contribute most of its revenue
At $ 4.50, SOS stock costs less than Riot at $ 54 and Marathon at $ 52 However, Riot and Marathon have more advanced crypto mining operations than SOS, and SOS may initially need s ” lean on second-hand machines
While SOS Limited is expected to benefit from the rise in crypto prices, it doesn’t look like a good investment at the moment Its old mining machines will make it difficult to compete with Riot and Marathon, and the stock looks overvalued. Hindenburg’s fraud allegations are serious and could lead to class actions that pose a major investment risk
SOS action may sound tempting to bargain hunters, but the company has continued to record losses despite increasing its cash requirements with its expansion in bitcoin mining It recently raised 125 millions of dollars by selling new stocks, which makes it seem like the risk of continued dilution of stocks Therefore, it is better to avoid SOS stocks right now
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World news – CA – SOS Squeeze shorts: is this the next GameStop?