Momo Stock Falls 30% in 5 Weeks
Momo, the Chinese social platform, has seen its share price fall over 30% in under 5 weeks.
On 19th September, Momo was valued at $47.73 per share. This has now dropped to just over $32. The price hit its deepest trough since February on 19th October, dipping to $30.46.
The company’s new market cap sits at $6.56 billion.
In July, a report critical of Momo was released by Spruce Point Capital. It argued that US investors had not made themselves fully aware of the nuances of Chinese business, and that the investment was more risky than many had supposed.
Following that report, the stock fell around $10 to just below $42. Prices recovered after a reasonably solid Q2 report, but began to fall again in mid-to-late September.
InvestorPlace analyst James Brumley suggests that the drop has been the result of wider tech trends. These trends have led investors to panic.
He argues: “Traders are clearly unplugged from any semblance of fundamentals right now, controlled by fear, greed and headlines.
“(…) Momo is (still) growing its top and bottom line at an impressive clip, and once the dust settles, the market will once again reflect its plausible future.”
The stock is currently ranked as a ‘Hold’ by researchers at ZACKS. Its next earnings release is expected to be 27th November 2018.
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