What happened
Shares of SGOCO Group (SGOC -2.25%) have skyrocketed today by a whopping 61% as of 10:55 a.m. EDT, after the company said it had regained compliance with the Nasdaq stock exchange. SGOCO has experienced extreme volatility in recent days as retail day traders have been piling into the Chinese fintech company, which was a penny stock not long ago.
So what
The Nasdaq exchange had warned SGOCO in May that it was out of compliance with its periodic filings, a crucial listing requirement that ensures that companies are providing investors with current information. The company had attributed the delay to difficulty in obtaining and compiling information.
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In a regulatory filing with the Securities and Exchange Commission that was submitted yesterday evening, SGOCO confirmed that it has now regained compliance with the requirement after filing its Form 20-F for 2020 with the SEC. That form is comparable to an annual report Form 10-K but is used for foreign companies that are headquartered outside the U.S.
Now what
SGOCO's annual report shows that revenue in 2020 declined to $4.3 million, worse than the $5.1 million in sales that it expected to report. That resulted in an operating loss of $67.3 million, which was primarily due to a goodwill impairment. The company's net loss last year was $67.9 million, or $0.69 per share.
But many volatile meme stocks have become detached from their companies' underlying fundamental performance, and traders probably aren't particularly concerned about the red ink. SGOCO now boasts a market cap of over $1.5 billion.