SOS Stock: Why Crypto Mining Play SOS Is Plunging 15% Today

Crypto mining and blockchain participant SOS Limited (NYSE:SOS) has been having a busy couple of weeks. Press releases from the corporate have coated numerous new enterprise strategizing that has been transferring the worth of SOS inventory.

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SOS is a Chinese tech firm that gives a variety of companies. Recently, SOS has been getting into the rising cryptocurrency market with its personal crypto mining operation and blockchain providing. SOS inventory has seen a pleasant enhance within the final week after the corporate introduced its intent to establish a digital asset exchange.

Yesterday, the corporate introduced its joint venture with Ronghe Finance to assemble a supercomputing middle in China. The announcement was nice information for SOS, because it noticed plans to bodily complement the corporate’s enterprise into cryptocurrency. The middle will accomplish a number of objectives, however most notably for SOS stockholders, it should set up help for crypto foreign money mining and blockchain property.

SOS Stock Down After Most Recent Announcement

Even in spite of everything this excellent news, SOS inventory is dipping. The losses are catalyzed by the corporate’s most up-to-date press launch.

The Ronghe three way partnership carries with it a major monetary burden for SOS. The building of the computing middle and funding the JV will price the corporate about $5 million. This invoice mounds on prime of the opposite bills the corporate is endeavor by way of its shift to crypto. The piling bills are driving the corporate to announce a brand new public providing on SOS inventory.

The Tuesday morning press release by SOS declares the corporate’s intent to supply 25 million American Depositary Shares at $5 a share. The providing intends to finance the additional growth of the corporate’s crypto mining community. It additionally will complement enlargement of the corporate’s crypto insurance coverage enterprise and different enterprise dealings, on prime of common bills.

The announcement hasn’t gone over too properly with SOS shareholders. Many present homeowners of SOS inventory concern dilution ensuing from the providing. As a consequence, many buyers are promoting off shares, driving the worth down by 15% this morning. Fears of overvaluation are making some weary of the announcement after an in any other case stable week for SOS inventory.

On the date of publication, Brenden Rearick didn’t have (both immediately or not directly) any positions within the securities talked about on this article.

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