Shares of SOS Ltd. (NYSE: SOS) pulled back as much as 18% Thursday on its announcement of a discounted $86 million registered direct offering “priced at-the-market” after a wild past week of trading.
In a statement today, the marketing analysis provider said it has agreed to sell 8.6 million American depositary shares and warrants to “certain accredited investors.”
The purchase price for each share and a corresponding warrant will be $10.00. That’s a $2.80 discount from Wednesday’s close.
The warrants will mature in five years from the date of issuance.
Lately, shares of SOS have been surging thanks to its expansion into the crypto mining space. Earlier this month, SOS said it received 5,000 mining machines from the “seller” quicker than originally expected. Then early this week, SOS got an endorsement from Shark Tank investor Kevin O’Leary.
It also helps that cryptocurrency (in particular bitcoin) has been a hot commodity on Wall Street as of late. Just ask Elon Musk’s electric vehicle empire Tesla (Nasdaq: TSLA), which poured $1.5 billion into bitcoin earlier this month.
As a result, there’s been a lot of buzz on social media regarding SOS.
By midday, SOS was trading at $11.18 per share. Even with today’s fall, SOS’ shares have nearly tripled since Feb. 10.
Back in December, I recommended buying SOS after its stock dipped on a separate $4.03 million directed offering. At the time it was trading at $1.25 per share. Now the stock has skyrocketed 794% since then. It also announced another registered direct offering in January worth $25 million.
From the offering announced today, the Qingdao-based company plans on using the proceeds to develop its cloud cryptocurrency mining and cryptocurrency security, as well as its insurance business. It also plans on using some of the funds for working capital and general corporate purposes.
The lone placement agent on the deal is Maxim Group LLC.
The company has been growing rapidly in terms of revenue. In December, SOS posted preliminary estimates for the 12 months ending December in what the company referred to as “record-breaking results.”
In the full year 2020, SOS expects to see revenues of around $49.5 million, skyrocketing 451% from 2019. It anticipates gross margins to be roughly 9% in the full year, up nearly double from 5% in 2019.
SOS also provided guidance for the full year 2021, expecting net revenue to grow by roughly 286%.