What happened
As of yesterday, shares of Skyx Platforms (SKYX -2.23%) were up roughly 240% for July. But today, investors are cashing in some of their windfall gains. There's no news for Skyx Platforms today, but the stock is down 22% as of 1:20 p.m. ET nevertheless.
So what
Have you ever tried to change a ceiling fan? Disconnecting wires can be a challenge, but it's a process Skyx Platforms wishes to simplify. Its SkyPlug will remain permanently mounted in the ceiling. And equipped ceiling fans and light fixtures can easily attach or detach to SkyPlug for installation and replacement. Through the company's app, it hopes to be a go-to platform for smart-home management.
Shares of Skyx Platforms had plummeted over 80% since the company's initial public offering (IPO) in February. But shares skyrocketed after Benchmark analyst Michael Legg placed a $15 per-share price target on Skyx Platforms stock. Trading volume surged as investors tried to take advantage of the strong upside possibility.
However, it looks like investors want to close out July by locking in gains on their Skyx Platforms trade. To lock in gains, these investors have to sell their shares. And selling shares places pricing pressure on the stock, which is why it's down today.
Now what
As a homeowner currently struggling with a ceiling fan, I can personally attest to the potential appeal of Skyx Platforms' SkyPlug product line. The only problem is it hasn't launched yet. The company placed an initial order with the manufacturer on June 1 and hopes to start registering pre-sales before the end of 2022.
Therefore, while July gains were spectacular for Skyx Platforms shareholders, prospective investors need to understand it has substantial execution risk. It appears SkyPlug is a good idea. But the company needs more than a good idea. It now needs to go out and see that it gains mainstream adoption, which is possible but challenging.
