The past three months have been absolutely bonkers for shareholders of Skypeople Fruit Juice Inc (NASDAQ:SPU) stock. SPU stock is up 550% over that time, including a huge spike in mid-July to its 52-week high.
Just two days ago, Skypeople stock surged about 50%, opening at $6 and closing at $9.50. But shares of SPU stock came back to the ground the following day, opening at $10.44 and closing at $8.32. Today, the fruit juice maker is back up about 30%. What a ride!
This rollercoaster price action was brought to you by the good people at GeoInvesting, who published a report that was widely misinterpreted by several media outlets. According to GeoInvesting:
Media assumptions that our DD on $SPU was negative were incorrect. See our full report here https://t.co/jRA5hu09KI
— GeoTeam (@GeoInvesting) August 31, 2016
The downside came on GeoInvesting’s belief that nano-cap Chinese stocks have lost their “swagger” thanks to numerous cases of fraud. The firm expressed skepticism about Skypeople’s transaction with Shaanxi New Silk Road Kiwifruit Group to sell 51% of a top subsidiary.
However, GeoInvesting hinted to “some positive findings” as well, including evidence that the deal values Skypeople’s subsidiary at $100 million, or $25 per share. SPU stock reacted to the potential bullish catalyst with some 7 million shares trading hands compared to the usual 1.3 million.
Skypeople’s awakening started back in July seemingly out of nowhere, with SPU spiking to the point where the Nasdaq halted trading of shares. Skypeople said the movement came on rumors that the company would be acquired by Future World Group … but that the report was incorrect.
Right now, SPU is trading on whispers. It’s a $40 million Chinese company that long traded on just tens of thousand of shares daily. Its revenues struggle to clear nine digits yearly, and while it’s profitable, earnings have been shrinking.
And according to Thomson Reuters, no analysts currently cover the stock.
Trading SPU is a shot in the dark. But that’s not keeping everyone from getting swept up in this stock.
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.
