Do you know the company AgileThought (NASDAQ:AGIL)? Most people didn’t until today. But this previously unknown penny stock surged today during premarket trading, turning many heads. The consulting firm had spent the past month watching shares trend steadily downward, losing more than 66% of their value. But this morning, they surged to impressive levels, alerting investors to the possibility that retail traders have found their latest meme stock. Further supporting that argument is the fact that the company recently filed for Chapter 11 bankruptcy and is reported to have $220 million in debt. It has announced plans for “strategic financial restructuring,” but that likely isn’t doing much for the company’s share price.
Does this mean that AgileThought really is the next meme stock that investors should be watching? Let’s take a closer look at the company and assess what investors should be expecting.
What’s Happening With AGIL Stock
This morning saw AGIL stock skyrocket more than 80% during pre-market trading. Since markets opened, it initially traded well but has since started falling. After some early trading volatility, shares rose as high as 83%, but the stock’s trajectory has been choppy. As of this writing, it is currently up almost 90%. This comes after a highly volatile week for which AGIL stock is still in the red.
Can today’s performance be attributed to meme stock momentum? It certainly looks that way, especially given the recent bankruptcy news. This type of phenomenon calls to mind the iconic Revlon short squeeze of summer 2022, during which retail investors temporarily resurrected a retailer that had recently opted for Chapter 11. However, as all short squeezes inevitably do, it ended with the meme stock falling hard. This begs the question of how long AGIL stock can continue rising. As InvestorPlace’s William White reports:
“It seems likely that this movement is from traders jumping into AGIL stock following yesterday’s dip. We’ve seen this happen before when a company files for bankruptcy. Investors jump into the company at a lower price in an attempt to shore up its shares and leave with a profit.”
While AGIL stock may be surging right now, interest in it across social media is not. Data from Ape Wisdom reveals that it has been mentioned once in the past 24 hours and that upvotes have actually fallen 20%. This suggests that AgileThought may not be quite the meme stock it appears to be. However, given its impressive performance today following bankruptcy news, there’s no other explanation for its growth.
The company checks most meme stock boxes, including a clear inability to keep rising after a heavy trading surge.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Samuel O’Brient did not have (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.
