SOS Stock: 7 Things for Investors to Know About SOS Amid the Fraud Allegations

Chinese crypto company SOS Limited (NYSE:SOS) has been a staple on investor watch lists recently. Significant interest in this cryptocurrency mining and blockchain play has enticed many investors to jump in. Indeed, this stock has been nearly a five-bagger since the beginning of the year. Crypto investments are still red-hot, and this is one of the more speculative plays in this sector.

Cryptocurrency: Pile of altcoins represented as physical coins

Source: Shutterstock

Given all the interest in decentralized finance (DeFi) and cryptocurrency these days, investors are looking for maximum leverage to this trade. Indeed, the cryptocurrency sector is a global one, and investors are looking high and low for growth. China-based SOS has generated a lot of interest due to its potential and its U.S. listing.

However, investors in SOS stock will also note this stock has been more than cut in half over the past five weeks. Some serious allegations have been responsible for much of this drop. Let’s take a look at what the allegations are, and what this means for investors.

What to Know About the Fraud Allegations on SOS Stock

  • On Feb. 26, Hindenburg Research launched a short position and a series of allegations against SOS.
  • Hindenburg alleges that it visited the company’s main facility as listed in its regulatory filing and found it to be a hotel.
  • Furthermore, Hindenburg released a series of tweets on the subject, providing additional detail substantiating its claims. It calls SOS stock an “obvious China-based shell game reanimating the corpse of a former China based company that earlier imploded 90% from its highs.”
  • Since then, various contra reports have surfaced calling Hindenburg’s short thesis a “malicious short attempt.”
  • Scorpio VC’s research into Hindenburg’s short report highlighted discrepancies with the allegations. The company address, Scorpio claims, was correctly disclosed and other issues in the short report were disputed.
  • Since the end of February, shares of SOS stock have rebounded more than 35%. Investors appear to be siding with Scorpio VC and others who don’t believe the allegations to be true.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article.


Article printed from InvestorPlace Media, https://investorplace.com/2021/03/sos-stock-7-things-for-investors-to-know-about-sos-amid-the-fraud-allegations/.

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