SCWorx (NASDAQ: WORX) stock is up 50% premarket. WORX is not up because of any release from the company, at least as far as we can tell this is just a run up in the price of this particular stock. These things do happen of course but we always need to know why they’re happening. For only if we know why up can we work out when down, or even whether down?
What’s done at SCWorx: “SCWorx Corp. develops and markets health care information technology solutions and related services to improve healthcare processes and information flow within hospitals and other healthcare facilities in the United States. The company provides data content and services related to repair, normalization, and interoperability of information for healthcare providers, as well as big data analytics for the healthcare industry. It also offers virtualized item master file repair, expansion, and automation; electronic medical record management;” and so on. A perfectly respectable business to be in. But one that’s not greatly profitable, even one that doesn’t produce a great deal of revenue. Last accounts have revenues of perhaps $1 million (rounded) with a loss of $150k.
The market capitalisation is around the $3 million mark (obviously dependent upon the price at which hour we use to measure) and that doesn’t seem wildly out of line.
SCWorx stock price from Google Finance
So, why this leap in the stock price? It’s not a short squeeze as the short position is well under half a percent. There’s no information release - the last thing we can see is back a few months and a contract with a New York hospital.
Well, except back in June when WORX stock jumped 300% in a day. And that, we think, is our answer. For WORX jumped that 300% and has spent the time since falling back to its starting point. And the way this works is that if speculators see they can pump and dump a stock - or, less strong as an allegation, get a momentum trade going - the once then that makes it easier to get it going again.
So, in the absence of any information to the contrary we would say the SCWorx stock price rise today is simply that. A bit of a price move, others pile in and off it soars. We’d expect it to come back down again too as there’s no substantive information driving the price. The thing we don’t know - and you don’t either - is how high it will go before it will, nor when.
