Social commerce company Yunji (NASDAQ:YJ) typically flies under the radar. However, YJ stock is soaring almost 100% with just an hour left in the trading day. So what exactly is behind the big move higher? And what else do investors need to know now?
To start, investors should know what Yunji is all about. Importantly, it specializes in social e-commerce. What does that mean? Well, social e-commerce is a subset of traditional e-commerce. Instead of just relying on online shopping, social e-commerce refers to companies that use social media and other customer-focused platforms to heighten engagement. This engagement then leads to purchases and brand loyalty.
With YJ stock skyrocketing on Tuesday, here is what else you need to know:
- Like many other social e-commerce firms, Yunji calls China home.
- Yunji has a market capitalization of just under $920 million.
- Additionally, it has been around since 2015.
- However, it filed with the U.S. Securities and Exchange Commission to come public in March 2019. This means YJ stock is relatively new to the public markets.
- Importantly, many consider Yunji an up-and-coming competitor to Pinduoduo (NASDAQ:PDD) and Alibaba (NYSE:BABA).
- Like those other companies, Yunji relies on social media platforms like WeChat to generate revenue.
- Recently, Yunji also launched its first livestreaming sales event through ByteDance.
- During that event, it brought in approximately 87.5 million yuan in gross merchandise volume and 10.7 million views.
- This is a similar business model to what Alibaba uses for Singles Day.
- Typically, Yunji focuses on beauty and personal care products, in addition to household goods, apparel, electronics and home appliances.
- However, it just launched a new partnership program to support agricultural companies.
- Yunji also announced it will host its third-quarter earnings call Nov. 26, 2020.
What Else You Need to Know About YJ Stock
Importantly, this is not the first time that YJ stock has soared higher on seemingly no news. Perhaps investors are eagerly awaiting the third-quarter earnings call, assuming numbers will look good. That could be the case, especially given the rise of e-commerce thanks to the novel coronavirus pandemic. Additionally, the 2020 Singles Day event also set new records, backing up the popularity of livestreaming to drive sales.
However, it is not entirely clear if the earnings news is what has YJ stock higher. The company has captivated investors on and off for its work with social e-commerce. Additionally, as it is often compared to Pinduoduo and Alibaba, it may appear hot as the holiday shopping season launches. Before diving in, investors ought to do their due diligence. Why? Well, Yunji has a history of flying higher and then coming back down. Additionally, the Chinese government has targeted the company before, accusing it of a pyramid selling business model via social media. This means it has risks as it ramps up.
For now, keep an eye on YJ stock and on the upcoming earnings report.
On the date of publication, Sarah Smith did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Sarah Smith is a Web Content Producer with InvestorPlace.com.