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Why MOGU Stock Rocketed 59% Higher Today

By Rich Duprey – Jul 30, 2020 at 4:13PM

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The Chinese fashion and lifestyle company was one of the market's top gainers Thursday.

What happened

Shares of MOGU (MOGU 12.56%) kicked it into overdrive in afternoon trading Thursday, soaring 59% on no apparent news for the Chinese fashion and lifestyle company.

So what

MOGU filed its fiscal 2020 annual 20-F report with the Securities and Exchange Commission (a 20-F is similar to a 10-K annual report, but for foreign companies) after the market closed on Wednesday. But that doesn't seem to be the catalyst for the sudden surge in the stock.

Arrow rising over 2020

Image source: Getty Images.

First, while the financial report was filed yesterday, it actually reported the results back in May. So unless there was some golden nugget hidden within, it should have been a perfunctory filing. 

Second, the stock actually traded lower all morning long, but beginning a little after 1 p.m. today, it began rising. Then around 2 p.m., it was suddenly off to the races.

Now what

MOGU is a small-cap company with a valuation of under $240 million even after its big run-up today. Sudden spikes are part of what it does, as it started off July surging as high as $6.85 per share, only to crater to just above $2, the level from which it made its latest run.

Small, thinly traded issues are going to suffer from volatility, and just because one of its biggest investors is Tencent (TCEHY -2.33%) doesn't mean investors shouldn't be wary when buying into such international stocks.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Tencent Holdings. The Motley Fool has a disclosure policy.

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Stocks Mentioned

MOGU Inc. Stock Quote
$2.33 (12.56%) $0.26
Tencent Holdings Limited Stock Quote
Tencent Holdings Limited
$34.87 (-2.33%) $0.83

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