Penny stocks are curious equities. One day the stock price can be near all time lows. The next day the stock price can be back up by over 50%. In the case of Uxin Limited (UXIN) it’s exactly what happened on April 17.
The technology stock has a storied past. After hitting highs of more than $9 per share, UXIN stock price fell hard. On April 16 the stock hit 52 week lows of $1.41; a far cry from $9.
What Happened That Helped UXIN Stock Jump?
Uxin came under attack by a prolific short seller, which helped put pressure on the penny stock on April 16. On the 17th, the stock bounced back by more than 50% after the company came out with a statement the went against the claims that were previously made. So, why does this matter for UXIN shareholders?
As in many cases, short selling can cause a stock to plummet especially considered the climate for penny stocks and how there is typically lower liquidity as it is already. On Wednesday the company said that the short seller’s report “contains errors of facts, misleading speculations and malicious interpretations of events.”
In addition, the company said that it “firmly denies the baseless allegations that it has falsified any sales data,” and said founder Dai has “never voluntarily sold any shares in Uxin as alleged in the report.”
What’s Next For Uxin Limited Shareholders?
No one has a crystal ball. It’s also hard to determine if or when another short report comes out to demolish a stock. But based on what the company has already achieved, it may not be out of the question to see a new trend with UXIN’s stock price. At the end of the day, there’s one thing to be aware of and that is the fact that Uxin will likely have more volatility on the horizon.
