Shares of SGOCO Group (NASDAQ:SGOC) were up over 500% on Friday on heavy trading volume. The penny stock didn't release any news to trigger this price movement. As of 3:11 p.m. EDT, the stock was up 384% for the day.
SGOCO Group is a penny stock that manufactures phase change storage systems, among other items. Headquartered in Hong Kong, the company now has a market cap of over $1 billion but only $4 million in 2020 revenue, $3 million in cash on its balance sheet, and is currently unprofitable.
With no news released from SGOCO Group that could have caused this move, it is possible this huge jump was caused by Reddit traders or Wall Street firms buying up shares. SGOCO Group's average 10-day trading volume is only 664,000 shares. Today, its stock is on pace to trade over 100 million times. Right now, it is unclear who is behind this large trading volume, but there was high demand for SGOCO Group shares today that caused the stock to skyrocket, and it wasn't because the company's fundamentals changed.
It can be exciting to trade stocks that go up over 100% in a single day, but it is a dangerous game that can lead to huge losses. SGOCO is a penny stock with barely a real business but it trades at a market cap of over $1 billion. The stock may have gone up 500% this morning, but investors should stay far away from shares of SGOCO Group.