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Source: Africa Studio, Shutterstock
Summary
- What used to be a penny stock, and unknown to the investors up until this January, Koss stock continues to surge.
- This is not for the first time a company's stock is surging after it got popular on Reddit; earlier it had boosted GameStop's stock.
- Koss’ stock has skyrocketed and has gone up by 3008 per cent in a year.
Despite making the world's first stereo headphones in 1958, Koss Corporation (NASDAQ: KOSS, KOSS: US) never really took off and over the years it failed to compete with rival companies. However, it seems that the company's fortune may change for good this year.
What used to be a penny stock and pretty much unknown to the investors up until this January, Koss stock has suddenly burst into the scene and has continued to surge, attracting both criticism and appreciation from WallStreet giants. Since there is no direct news from the company that can boost its stock, this unexpected surge is likely due to a group on the popular website Reddit.
This Reddit-fuelled stock surge trend started with GameStop's (NYSE:GME), after the small time traders, exchanging ideas on the forum’s platform, boosted the stock to an all-time high.
Source: Pixabay
On Thursday, Koss' shares closed at US$25.80 a piece, up by 57.1 per cent. The surge came after the stock had dropped almost 22 per cent on March 24, 2021.
A look at the 'staggering rise'
Over the past five years, the company's stock mostly remained under US$ 4 and last year, it ended at US$ 3.44 apiece.
The New Year changed the company's prospects when a Reddit-led spike helped the stock hit US$ 127.45 per share on January 28, before closing at US$ 41.96 the same day.
The same month, it achieved an all-time high of US$ 64 apiece before falling to US$ 11.90 on February 23. However, the interest in Koss' stock has renewed recently and it rallying again.
Koss Corporation has a market cap of US$219 million and offers a 4.49 per cent return on equity. In the last one year, the company’s stock has skyrocketed and has gone up by a whopping 3008 per cent and 708 per cent year-to-date (YTD).
What do the company’s financials suggest?
The company released its second-quarter results in January, recording US$ 4.9-million sales, up by 18.4 per cent year-over-year (YoY).
The net income was US$0.5 million in Q2 2021, compared to a net loss of US$ 215,712 in Q2 2020.
The gross profit for Q2 2021 was US$ 1,617,897, an increase of 18 per cent YoY.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.
