Shares of SOS Limited (NYSE:SOS) surged more than 30% in pre-market trading on Wednesday. Targeted by short sellers and embraced by social trading aficionados, SOS stock tipped a high of $15 per share in mid-February before dropping to $4.77 over the next 10 days.
SOS is a Chinese tech company that recently entered the burgeoning cryptocurrency market with its own mining operation and blockchain offering. SOS stock got a boost at the end of March after announcing it would establish a digital asset exchange.
The broader crypto space has roared into April with the valuation of the entire cryptocurrency market pushing over the $2 trillion mark this week. The surge was led by Bitcoin (CCC:BTC), which has held its own market cap above $1 trillion for a week. Analysts said as long as the biggest crypto holds above $53,000, it will be able to maintain that market capitalization, Reuters reported.
Redditors Warn of SOS Stock Short Squeeze
Short interest in SOS stock has reached more than 216% of its shares shorted, according to MarketBeat, after a rough go in recent weeks. Hindenburg Research accused management of falsifying business announcements. What once was touted as a company primarily focused on solutions for emergency rescue services, its February acquisition of 5,000 cryptocurrency mining machines created a major rally.
In the last 24 hours, Reddit boards have been lighting up with comparisons to GameStop (NYSE:GME) and calls for short squeeze this morning. “We will start buying as many shares as we can get our hands on and we will limit sell those shares at or above $100,” promised one poster on an SOS-dedicated subreddit.
Meanwhile, another Redditor wrote: “SOS currently has 40% of their shares being borrowed, and 8% interest on those borrowed shares. We believe this is a prime candidate to pop, especially after hitting a double bottom. VWAP spike would technically help us as well.”
On the date of publication, Robert Lakin did not have (either directly or indirectly) any positions in the securities mentioned in this article.
InvestorPlace contributor Robert Lakin is a veteran financial writer and editor, following fintech, agtech and property tech startups.
