Shares of Skyx Platforms (SKYX 2.41%) plummeted on Tuesday, even though the company released a positive press release, and it's possibly for a troubling reason. As of 2:15 p.m. ET, Skyx Platforms stock was down 39%.
Skyx Platforms has come up with an innovative way to mount and power ceiling fixtures, including fans, with its SkyPlug product line. On June 1, it announced that it had ordered its first run from General Electric in hopes of commercializing them later this year. But much bigger news came today.
On Tueday, Skyx Platforms announced that The American National Standards Institute (ANSI) had approved the installation instructions for its SkyPlug. The press release didn't say when exactly ANSI voted on this, but it's a big announcement. Products need to be deemed safe by groups like ANSI.
However, Skyx Platforms is plummeting, and the timing couldn't be more eyebrow-raising. Today, the lockup period for Skyx Platform stock expired, so insiders can sell shares after having been restricted since the company went public in February.
Of course, there's no way to know who's selling. But today's plummet doesn't seem like a mere coincidence.
More troubling still is that Skyx Platforms recently skyrocketed after receiving a $15 per-share price target from Benchmark analyst Michael Legg. Benchmark was the underwriter of Skyx Platforms' initial public offering (IPO). Moreoever, Legg is the only prominent analyst with a rating on Skyx Platforms stock and made this bold price target when it was trading around $4 per share. It rocketed to nearly $8 per share the following day.
It's been a volatile roundtrip for Skyx Platforms's shareholders, as the stock is trading at just $3.73 per share as of this writing. All of this being said, the company's SkyPlug product does look like a promising innovation and it's patented, so it can earn high-margin licensing revenue if it takes off.
It's possible that Skyx Platforms stock is just down with the market on Tuesday and down sharply because of its recent run-up. And today's press release could have merely coincided with the expiration of the lockup period by luck. No matter what the exact reason for today's drop, my approach to this stock remains unchanged: It's interesting, but I wouldn't even consider investing until the company is much closer to commercialization than it is today.