In today’s volatile session, investors in most large and mid-cap stocks are seeing gains. That said, this increasingly risk-on sentiment is being felt more in smaller-cap and micro-cap stocks today, with some rather impressive moves building. Among the biggest winners in the penny stock category today is Lottery.com (NASDAQ:LTRY), with LTRY stock up more than 30% at the time of writing.
This move appears to be driven mostly by speculative interest in this company. With a market capitalization of $15 million including today’s price action, Lottery.com is not on many investors’ radars. That said, with a very low price per share around 30 cents and a low float comes the potential for such surges.
Lottery.com has seen such surges in the past. Accordingly, this appears to be a stock some momentum traders may be interested in. That said, the company has been posting big losses, and at less than $1 per share, LTRY stock is at risk of de-listing. Numerous letters were received from the Nasdaq exchange requiring a reverse split to maintain compliance and noting quarterly reports that have been delayed. They also included questions on a previous Form 8-K filing, providing further risk.
Let’s dive into what investors may want to consider when it comes to this penny stock.
What’s Going On with LTRY Stock?
Given the apparent serious trouble Lottery.com is in with maintaining its compliance, this move may seem like a head-scratcher to most. Indeed, the company has lost the vast majority of its value for a reason. Most investors clearly don’t want anything to do with it, particularly at these levels.
Lottery.com completed its reverse merger with a special purpose acquisition company in October of last year. Based on the company’s $10 per share merger price, LTRY stock has lost a full 97% of its value since its initial public offering. That’s including today’s massive rise.
Thus, LTRY stock has been headed mostly down over the intermediate term. While chatter appears to remain high around the shares, given the volatile moves this stock has seen, I think it is too risky to even put on the watchlist.
In this market, investors are paying for quality. As it happens, LTRY stock may bounce around a bit at these lower levels, but appears to be lacking in the quality department.
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On the date of publication, Chris MacDonald 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.