FINANCE 

Rocket Stock Is Falling After the Company Reported Earnings

Rocket Stock has surged over 500% in the past year, while the market has dropped over 10% but most traders had lost billions of dollars.

Rocket Stock has surged over 500% in the past year, while the market has dropped over 10% but most traders had lost billions of dollars.

We have seen trading in Rocket Stock soar to incredible levels in the past couple of months. After basically nowhere before the April highs, Rocket Stock suddenly moved from one of the hottest and easiest opportunities in all of tech to a tough sell as the company reported earnings.

Rocket Stock is a rapidly growing technology company with no real profits, which has skyrocketed from a paltry start with only a few investors to now boasting about $5 billion worth of market capitalization as a $10B market cap company.

However, Rocket Stock announced revenue of only $100,000 last quarter compared to the consensus estimate of $12 million and a year-over-year increase of almost 2,000%.

The company reported a negative cash flow of $7.5 million and without the $25 million in the first quarter it would have been $12 million in the red.

One investment firm reported that a sizable percentage of its clients had had losses of 80-90% this year.

That compared to a decline of more than 10% for the Nasdaq this year.

This was also not the first quarter in which Rocket Stock didn’t meet consensus estimates, with two quarters in a row of missing estimates. The company has a negative cash flow of $7.5 million but is claiming to be cash flow positive.

The company also explained that it had inflated its expenses by making new hires that were not justified in the company’s revenue guidance. That was primarily due to a one-time training expense.

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