What happened
Shares of the Chinese e-commerce company Onion Global Ltd. (OG) spiked today after the company announced a new events initiative designed to promote its private-label products and brands.
The tech stock was up by 28% as of 11:51 a.m. EDT.
So what
Onion Global announced today that it would host ongoing "LUCA Elite Club" events intended to "provide in-depth brand knowledge" to the company's social media influencers, known as "key opinion consumers" (KOCs).
KOCs are integral to the company, as they promote Onion Global's products and brands.
Image source: Getty Images.
The company will use these new events to improve its brand awareness and promote its products to KOCs, which in turn help spread the word about the products online.
In a press release, Onion Global said that it has 730,000 KOCs and that the events will "drive stronger revenue growth."
Now what
Onion Global investors were clearly happy with the company's event announcement today, but that doesn't mean that there's a lot of game-changing substance in this press release.
A news release about new events, even if they help inform people about products, hardly warrants a double-digit increase in a company's share price in just one day. Additionally, a vague statement that the events will "drive stronger revenue growth" shouldn't influence investors to such a large degree.
Onion Global went public just a few months ago and its stock price has been very volatile since the IPO. Over the summer its share price was cut in half, only to recover since the beginning of September.
As a newly publicly traded company that's already shown that its share price can be greatly influenced by minor press releases, investors may want to be cautious with this stock.
