Potential investors in SOS (NYSE:SOS) stock will remain, in a word, confused. Ostensibly investors are interested in SOS because of its association with cryptocurrency mining.
That’s what I, along with my other InvestorPlace colleagues, have been focused on in writing about the company.
However, it seems that the company has upgraded its website since the last time I wrote about it in late April. The site was more dated, but no less opaque, at that time.
And although it’s been upgraded to be more eye-catching, it has done little to inspire any further confidence in SOS stock. Let’s start with financial information related to SOS.
Cryptocurrency and blockchain technology are concerned with one thing: transparency. The overarching appeal of defi, blockchain technology, and cryptocurrency is that of the decentralization of information. Ultimately, consumers are interested in crypto because it promises more transparency.
SOS remains anything but transparent. Although it has upgraded its website to be more visually appealing to investors, the underlying problem persists.
Anyone can simply navigate to the company’s investor relations tab of the site and find its quarterly results. That’s transparent enough, right? Well, it’s transparent in that at least you can navigate there. However, you won’t be able to ascertain anything of value about the company from its investor relations page.
When I last wrote about SOS in late April I complained that the latest information I could find related to the company under its former XRF ticker. I mentioned that it was a form 6-K acknowledging that the company would be unable to meet its filing requirements with the SEC in a timely manner. The company was in trouble, and it faced compliance issues. Not a great place to be, and certainly not news that should make investors break down the door to get in and invest in SOS stock.
Here we are, following an upgrade to the website and nothing has changed. The same form 6-K remains the most timely information on the company.
What Does SOS Do?
That’s a straightforward question and it deserves a straightforward answer. Unfortunately, there isn’t one.
SOS is getting lumped in with cryptocurrency miners including RIOT Blockchain (NASDAQ:RIOT) and Marathon Digital Holdings (NASDAQ:MARA). And the company does have crypto mining operations according to its website. However, the new website also lists a bevy of other businesses as well, which seem completely new.
The current primary business seems to be related to emergency services, insurance, financial products for individuals in distress, and health and housing services. One of the company’s purported product services (called “medical apparatus”) simply has no information at all when you navigate there.
SOS suffered short seller claims back in February at the hand of Hindenburg Research. SOS refuted those claims and the argument seemed to die down at that time. I’m not privy to any information which can refute or confirm those claims. Whether they were true or not is almost immaterial at this point. SOS is simply opaque.
It is either pivoting, or potentially doing something more nefarious in leading investors on a wild goose chase in relation to the rise of crypto mining. In the best case scenario it has legitimate crypto mining operations.
What to Do
In my opinion, SOS is unattractive in any of those scenarios. If it’s pivoting into insurance related services, it’s simply uninteresting. If its crypto mining operations are a sham, obviously there’s no reason to be interested. And if its crypto mining operations are legitimate, then there’s good reason to stay away given the volatility of the broader sector right now.
Therefore, I see no reason to consider SOS stock.
On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Alex Sirois is a freelance contributor to InvestorPlace whose personal stock investing style is focused on long-term, buy-and-hold, wealth-building stock picks. Having worked in several industries from e-commerce to translation to education and utilizing his MBA from George Washington University, he brings a diverse set of skills through which he filters his writing.
On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More: Penny Stocks — How to Profit Without Getting Scammed