Blackboxstocks (NASDAQ: BLBX) stock price has been in the spotlight in the past few days after surging by more than 100%. The little-known stock soared to a high of $9.47 on Monday, which was much higher than last week’s low of $2.35.
What is Blackboxstocks and why did it rise?
Blackboxstocks, is a small company that has been trending in key social media platforms like Stocktwits and Reddit. It is a little-known firm in the financial services industry where it offers real-time analysis on thousands of stocks and options.
It provides these analyses through its website and mobile applications. In its recently-filed 10k report, the company said that it has thousands of subscribers from the US and other 41 countries. These subscribers pay $99 per month or an annual subscription of $959.
Blackboxstocks stock price has jumped even after the company published weak financial results last week. The results revealed that its total revenue crashed by 36% on a year-on-year basis to $1.07 million. Also, its loss per share of 36 cents was worse than expeted.
For the full year, Blackboxstocks revenue came in at over $4.9 million, down from the previous year’s $6.12 million. The company attributed this performance to the overall weak markets in 2022 as global equities plunged.
Also, the management blamed the ongoing trend for people ending their subscriptions for the challenge. For a company like Blackboxstocks, the challenge is that subscribers will always want results for paying $99 per month. And since predicting the performance of stocks is not easy, many of them end up ending the subscription after the first month.
Therefore, the company is now working on a new strategy by focusing on enterprise customers like brokerages and fintech platforms. It is still too hard to see how the company will succeed in this since the industry is too competitive.
Is it safe to buy BLBX stock?
BLBX chart by TradingView
The BLBX stock price has jumped sharply recently as the company unveiled a one-for-four stock split last week. That split was necessary for the company to maintain its Nasdaq listing, which requires shares to remain above $1.
In the long-term, I believe that the Blackboxstocks stock price will crash as investors brace for more revenue slowdown and churn. As a result, this drop could see the shares drop to the next support level at $3.98, the highest point on April 6. This price is ~26% below the current level.
Correction
Blackboxstocks has reported that it will have a reverse merger with Evtec Group, a company that provides automotive parts to companies like Aston Martin and Ford.
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