Why Facedrive Stock Soared Then Tanked This Week

Facedrive (TSXV:FD) stock has been on a rampage lately, soaring 400% and then falling 36% in a week. So, what on Earth is going on?

| More on:

It’s been quite the week for Facedrive (TSXV:FD). Those invested in Facedrive stock have been on a wild ride that, frankly, they probably are sick from by now. So, today, let’s look at what’s been going on with the stock, and what Motley Fool investors need to know.

What happened?

It all started exactly a week ago. At that time, shares of Facedrive stock traded at just $0.88 per share. Then suddenly, those shares started to climb based on literally no news at all! By Tuesday, Sept. 21, shares reached $4.42 per share, up 402% in a matter of days.

But then, the opposite happened. The next day, it seemed that those initial investors wanted their winnings quickly. Facedrive stock went into free fall. From the highest point on Tuesday to the lowest point on Wednesday, the stock lost 36% of its value before the markets closed.

So what?

Motley Fool investors are likely confused on either side of Facedrive stock. On the one hand, it was unclear why the increase happened so quickly. On the other, it’s also unclear why there was such a fast selloff. But it looks like it all stems from the same initial point.

About two weeks ago, both the former and incoming chief executive officers (CEOs) of Facedrive stock started selling off the stock in massive amounts. Former CEO Suman Pushparajah pocketed a total of $2.3 million from selling shares. Furthermore, former CEO Sayan Navaratnam stated he plans to sell nine million of his 30 million shares in the company. Another founder of the company has also sold 800,000 shares recently. And there has been talk of bankruptcy in the near future.

All of these massive sales of Facedrive stock drove the price down, creating a large changing of shares over the next few days. This, of course, led many to believe that Facedrive stock would rally eventually, so the share price below $1 was a great deal. And they might be right, but others also latched on far too quickly. Hence the share price catapult by 400%.

Now what?

It’s likely that these same shareholders caught on to the fact that there really isn’t much behind Facedrive stock at this point. The company continues to operate at a loss, with revenue not coming anywhere close covering those losses quarter over quarter. And not everything can be blamed on COVID-19.

And honestly, analysts are at a loss when it comes to this stock. It’s far too new and volatile to come up with any type of forecasting. So, for now, Motley Fool investors would do well to stay away from Facedrive stock — at least until their own executives are confident to keep it in their own portfolios.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

More on Tech Stocks

The virtual button with the letters AI in a circle hovering above a keyboard, about to be clicked by a cursor.
Tech Stocks

Emerging Canadian AI Companies With Big Potential

These tech stocks are paving the way to an AI-filled future, but still offer enough growth ahead for a strong…

Read more »

Young Boy with Jet Pack Dreams of Flying
Tech Stocks

Is Constellation Software Stock a Buy, Sell, or Hold for 2025?

CSU stock has long been a strong option for high growth, high value stocks. But are there now too many…

Read more »

An investor uses a tablet
Tech Stocks

Canadian Tech Stocks to Buy Now for Future Gains

Not all tech stocks are created equal. In fact, these three are valuable options every investor should consider.

Read more »

dividend growth for passive income
Tech Stocks

2 Rapidly Growing Canadian Tech Stocks With Lots More Potential

Celestica (TSX:CLS) and Constellation Software (TSX:CSU) are Canadian tech darlings worth watching in the new year.

Read more »

BCE stock
Tech Stocks

10% Yield: Is BCE Stock a Good Buy?

The yield is bigger than it's ever been in the company's history. That might not be a good thing.

Read more »

Happy shoppers look at a cellphone.
Tech Stocks

So You Own Shopify Stock: Is it Still a Good Investment?

Shopify (TSX:SHOP) stock has had a run, but there's still room to the upside.

Read more »

A person uses and AI chat bot
Tech Stocks

AI Where No One’s Looking: Seize Growth in These Canadian Stocks Before the Market Catches Up

Beyond flashy headlines about generative AI, these two Canadian AI stocks could deliver strong returns for investors who are willing…

Read more »

Data center servers IT workers
Tech Stocks

Better Buy: Shopify Stock or Constellation Software?

Let's dive into whether Shopify (TSX:SHOP) or Constellation Software (TSX:CSU) are the better options for growth investors in this current…

Read more »