What happened
Meme stocks were at it again today as a number of popular Reddit names soared, with Sgoco Group (SGOC) among them.
Shares of the Hong Kong-based fintech finished Friday up 12.6%.
Image source: Getty Images.
So what
There was no company-specific news out on Sgoco today. Instead, the company was one of several meme stocks that soared as traders on Reddit and other social media platforms bid up prices on a wide range of stocks.
The biggest winner of the group today was Support.com, whose shares jumped more than 200% before closing with a more modest 34% gain. Sgoco, meanwhile, garnered several mentions on Reddit threats as users pushed for a short squeeze in a number of stocks.
Reddit traders have been focused on the stock since Wolfpack Research declared a short position in the company on Aug. 18, saying it sees no "reasonable fundamental long thesis" in the company. Wolfpack also pointed out that three of the company's leaders and largest shareholders were arrested by Hong Kong police in December in relation to an alleged fraud scheme.
Sgoco shares surged the day that news was announced and have continued to climb since then, trading in high volume over the last two days.
Now what
Sgoco shares first gained the attention of traders on Reddit back in July when the stock jumped nearly 1,000% in just two days even though there was no news out on the company. Instead, traders piled into the lightly traded stock to send it soaring on high volume. Sgoco's valuation now seems disconnected from the business, which finished 2020 with revenue of just $4.3 million.
Given that, it's best for long-term investors to stay away from Sgoco.
