Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Diginex Are Plunging Today

By Bram Berkowitz - Updated Apr 19, 2021 at 1:05PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The firm reported record volume on its trading platform, but is likely seeing a sell-off after a recent short report.

What happened

Shares of the Hong Kong-based digital financial services company Diginex (NASDAQ:EQOS) had fallen more than 20% as of 12:40 p.m. today after it reported record volume on its trading platforms. 

So what

Diginex shares fell after the company today announced record trading volume of more than $1 billion in the month of April. Average daily volumes during April grew more than 300% compared to average daily volumes in March.

The company attributed the volume increase to its EQUOS cryptocurrency exchange, which launched its first digital token called EQUOS Origin on April 8. Since the launch of that token, EQUOS has recorded more than $100 million in daily volume.

Line with arrow moving downward.

Image source: Getty Images.

Despite the seemingly positive news, shares likely fell because the firm Iceberg Research recently issued a short report on Diginex. The report cited corporate "red flags" and an unreliable transaction history. The report also claimed that Miles Pelham, the founder of Diginex, has sold all of his shares.

Now what

The discrepancy between the record trading volume and short report makes the company a little hard to read right now. I would certainly invest with caution and thoroughly investigate all of Iceberg's claims before purchasing the stock.

The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
390%
 
S&P 500 Returns
125%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/12/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.