Wearable Devices (NASDAQ:WLDS) stock is skyrocketing on Thursday off the back of a critical disclosure. Earlier this morning, the Israel-based company announced that preorders are available for its flagship product, a neural input interface system that allows users to control digital devices via subtle finger movements. At one point blasting WLDS stock up more than 300%, shares are now trading up by around 250% as of this writing.
Fundamentally, Wearable Devices commands the potential to take digitalization to the next level. Leveraging its artificial-intelligence (AI) powered non-invasive motion sensing innovation, the company’s marquee product — the Mudra Band — integrates with Apple’s (NASDAQ:AAPL) Apple Watch to facilitate touchless interfacing. In other words, users will able to use the Apple Watch without physically touching the device, theoretically empowering greater utility.
That said, although WLDS attracted some early buzz because of its potential, its general volatility is a reminder of the dangers of speculative initial public offerings (IPOs). Prospective investors should still conduct careful due diligence before investing in this name.
WLDS Stock Rises on the Realization of Underlying Ambitions
Prior to its public market debut, Wearable Devices mentioned in a Form F-1 disclosure filed with the U.S. Securities and Exchange Commission (SEC) that the Mudra platform carries significant implications beyond adding utility to the Apple Watch. Specifically, Mudra has potential applications for smartphones, augmented reality (AR) devices, virtual reality (VR) headsets, televisions, PCs and more.
Getting this innovation to market has always been one of the key question marks surrounding WLDS stock. Similar to other speculative enterprises, the bulk of Wearable Devices’ bullish thesis centers on its potentiality. Now with the Mudra Band available for preorder, though, investors are regaining some confidence.
Unfortunately for longer-term stakeholders, the journey hasn’t been easy. Wearable Devices made its public debut in September 2022. At the time, following a record-breaking IPO cycle in 2021, the arena for new listings slowed to a crawl. Thus, retail investors just weren’t as excited about WLDS stock as they might have been in 2021.
More critically, the company’s financials have also presented a tough picture. Last year, Wearable Devices generated just $45,000 in revenue against a net loss of $6.5 million.
Blushes Spared
Another factor bolstering WLDS stock today is the company’s announcement earlier this week about its status on the Nasdaq. Specifically, management disclosed that the exchange granted Wearable Devices an additional 180-day compliance period (or until Nov. 20, 2023) to regain compliance with its minimum bid price rule. Nasdaq first informed the company on Nov. 23, 2022 that shares had failed to meet the minimum $1 bid price requirement.
So, today’s dramatic swing seems to have killed two birds with one stone — reaffirming investor confidence and fulfilling a critical Nasdaq benchmark. However, the wildness here also reflects the risks associated with speculative IPOs. Despite the triple-digit gain, WLDS stock is still down 37% since its debut.
On Penny Stocks and Low-Volume Stocks:?With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that?InvestorPlace.com’s writers disclose this fact and warn readers of the risks.
Read More:?Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Josh Enomoto did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
