Shares of Chinese e-commerce company Yunji (NASDAQ:YJ) soared in early trading on Wednesday, after the company highlighted sales figures from a recent live-stream event. As of 10:30 a.m. EDT, Yunji stock was up only 3%, but it had been up 18% earlier in the session.
According to a press release from Yunji, it held a live-stream sales event on a platform called Douyin -- owned by TikTok's parent company, Bytedance. During the event, Yunji's CEO highlighted over 40 different products in various categories. And Chinese consumers apparently liked what they saw. The company generated gross merchandise volume (GMV) of RMB 87.5 million from the event.
This is roughly equivalent to $12.9 million. For perspective, Yunji's GMV for the second quarter of 2020 was about $1.1 billion. So while the live-stream event did produce sales, it's a relatively small figure for the company.
Perhaps this is why Yunji stock didn't sustain its early gains. As a penny stock, it doesn't take much to send shares soaring, as we initially observed in today's session. But as investors got a little time to digest the GMV numbers from the live-stream event, they realized how small it was and how the upward move was overdone.
However, there is material information in today's press release for long-term Yunji investors. The company said it was its first time doing an event like this on an external platform. It intends to pursue more external platforms, given the success of the Douyin event. Increasing its digital footprint in this way could help Yunji garner more consumer attention, increasing future sales as a result.