There are stock rallies that sound humongous and there is the price action in racing video games maker Motorsport Games (NASDAQ:MSGM) this week that would make you raise your eyebrows. The stock is up nearly 200% today. This is on top of the 700% gain the stock witnessed yesterday!
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While the average trading volume in MSGM hovered at 137,700 shares over the past three months, it has seen an average volume of 50.15 million yesterday. So what explains the wild ride in this ~$40 million market capitalization company with a beta of -1.17 and a short interest of 6.1%.
Last year, MSGM had noted it was not following NASDAQ’s requirements for minimum outstanding shares and board constitution. The company has now taken care of these pain points with a board rejig and a share issuance.
The maneuver has done wonders for the stock already and the company is taking this a notch higher by paring down its debt by $1 million. This also means lower interest outgo for MSGM.
Curiously, another gaming name Mobile Global Esports (NASDAQ:MGAM), which has a similar sounding ticker as MSGM is up in double digits too. MGAM had received a NASDAQ deficiency notice in December and has brought in a new data officer this month.
Consequently, today, MSGM shares are all set to completely wipe off the 42% price erosion of the past year and trade above the ~$47 52-week high last seen almost a year ago. On the other hand Wall Street’s consensus price target of $9.50 points to a potential 55.61% downside in the stock.
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