A substantial stake acquisition in any company can significantly boost investor sentiment. If the company in question is a penny stock with a market cap of less than $30 million, a price rally is almost inevitable. This is the case with MicroAlgo (NASDAQ:MLGO), which provides algorithm optimization and compute power boosting services.
The Stake Acquisition
MLGO’s share price rallied by nearly 288% yesterday after Masaya Otsuka, a Japanese investor, acquired a 13.56% stake in the company. While little else is known about Otsuka, he clarified in an exchange filing that the investment was for passive purposes.
Surge in Trading Activity
The development was enough to trigger a rally in MLGO’s share price. Trading volume in the stock jumped to 135 million shares yesterday, compared to an average trading volume of just 4.88 million shares over the past three months.
Notably, MLGO shares experienced a similar spike earlier this month after the company teamed up with WiMi Hologram Cloud (NASDAQ:WIMI) to set up a micro-consciousness quantum research center.
Will MLGO Stock Go Up or Down?
Despite the recent rally, MicroAlgo shares still remain nearly 35% lower over the past year. The stock is beginning to give up some of its yesterday’s gains with a nearly 13% drop in the premarket session today. While analyst coverage on MLGO remains scant at present, the TipRanks Technical Analysis tool is currently flashing a Sell signal on the stock.
Read full Disclosure
