SOS Ltd (SOS) stock went down 5.86% in the normal trading session on Tuesday, April 6, 2021, but it jumped 31.11% in the extended trading session. SOS stock has moved down by -19.64% in the past week. Over the past three months, the stock has gained 212.50%, while over the past six months, it has added 122.77%.
Let’s try to find out the reason behind it up and down on Tuesday.
SOS has to face several Class Action Lawsuits
On April 6, 2021, Pomerantz LLP announced the filing of a class-action lawsuit against SOS Limited in district court for the district of New Jersey. The class action is filed on the behalf of all persons and entities seeking to recover damages that purchased or otherwise acquired SOS American depository shares between July 22, 2020, and February 25, 2021.
Wolf Haldenstein Adler Freeman &Herz LLP, The Schall Law Firm, Bronstein, Gewirtz & Grossman, LLC also filed separate class-action lawsuits against SOS Limited yesterday April 6, 2021.
According to the Complaints, the Company made false and misleading statements to the market regarding the Company’s business, operations, and compliance policies throughout the class period. According to the allegations, SOS used a pump and dump scheme and used fake addresses and photos of crypto miners to create an illusion of success.
SOS rejected the claims and said that it is looking forward to vigorously defending itself, addressing these matters and providing more information in the coming days.
Revealing the value of Registered Direct Offering
On March 30, 2021, SOS said that it has done a purchase agreement with certain accredited investors to purchase $125,000,000 worth of its American Depositary Shares and warrants in a registered direct offering.
SOS has agreed to sell 25,000,000 ADSs and warrants to purchase 25,000,000 ADS. The warrants will have an exercise price of $5.00. the company is expecting gross proceeds of $125,000,000 from the offer.
Joint Venture with Ronghe’s Affiliate
On March 29, 2021, SOS limited announced that its subsidiary SOS Information Technology has signed an agreement with Qingdao Ronghe Finance Holding Group Co., Ltd to form a new joint venture which will be called SOS Ronghe Digital Technology Co., Ltd.
Both companies will establish a supercomputing centre in Qingdao and the registered capital of the new company will be approximately $9,174,000.Ronghe will contribute 49% and SOS will contribute 51%.
We have several reasons for SOS stock going down but there is no reason yet for its surging in the after-hours on Tuesday.