The novel coronavirus is continuing to reveal to us industries that win out when consumers are stuck at home. The online used car sales industry is one of those winners. And, some recent news is elevating new industry player Uxin (NASDAQ:UXIN) stock to new heights.
Some skepticism has followed the used car market. Much of the car buying process has relied on buyer inspection. However, despite this skepticism, the industry has grown impressively. And with the coronavirus pandemic shutting in many car buyers, the turn to online options was obvious and natural. By the end of 2020, the industry was seeing millions of transactions.
Uxin is a Chinese-based company that provides an online platform for these used car transactions. Think of it as China’s Carvana (NYSE:CVNA). Unlike Carvana, however, Uxin is a more volatile option. The company’s market capitalization is extremely small under $600 million.
The volatile nature of this penny stock does worry investors. But, its Thursday announcement has been sending shares rocketing in value. The company has made public its entry into a binding term sheet with two major Asian investment firms.
The names of the firms are not yet public. What we do know is that if a definitive agreement is reached between the firms and the company, Uxin is looking at a $300 million investment.
UXIN Stock Rockets After Announcement
The news has huge implications for Uxin. An investment of this magnitude can do a lot to bring the company out of its small-time mystique and into the spotlight.
The announcement has triggered immediate positive response for the company. UXIN stock has soared today, and shares are currently up by over 50%. Likewise, trading volume is up quite a bit, with 191 million shares traded compared to its average 5 million.
On the date of publication, Brenden Rearick did not have (either directly or indirectly) any positions in the securities mentioned in this article.