SOS Limited (SOS) Stock Price Spiral Downwards Amidst Controversy

SOS Limited (SOS) stock prices were down 5.62% as of market close on April 15^th, 2021, resting the stock at USD$4.53. Following pre-market fluctuations saw SOS stock prices further plummet by 5.96%, bringing the stock price down to USD$4.26.

SOS Accused of Scamming Investors

This consistent downward trend in SOS stock prices reflects the controversy surrounding the company as of late. On February 26^th, 2021, Hindenburg Research and Culper Research released a damning report on SOS, alleging that the company is an elaborate hoax. In their report, they accuse SOS of using fake addresses and doctored photos of their assets to mislead investors.

Evidence Stacked Against SOS

With a slew of condemning evidence raised in the report, the analysts revealed that a hotel room is listed as SOS’s headquarters in their SEC filings. Even more incriminating is the allegation that the published photos of SOS’s mining rigs were doctored. In fact, the miners in the photos weren’t even the A10 Pros the company had claimed to possess. Rather, these pictures were of Avalon’s A1066 miners. The final nail in this particular coffin came when Hindenburg Research exposed images from SOS’s website to have been taken from a legitimate rival, RHY.

Extent of Alleged Misconduct

Doubts were also raised in regard to their purchase of mining rigs as part of their ongoing efforts to consolidate their entry into the cryptocurrency sector. The company SOS claimed to have purchased mining rigs from appears to be a fake shell company. On March 9^th, 2021, SOS conceded that HY was, in fact, formed to preserve the confidentiality of the company having bought used mining rigs from a Chinese seller. On March 12^th, 2021, Culper Research disclosed the direct link between HY and SOS board member Wenbin Wu, alleging that SOS’s concerns for confidentiality were in fact a cover up for fraud via an undisclosed related party transaction.

Is this the End of the Line for SOS?

Defending itself against these allegations is absolutely crucial for SOS at this point, but the task seems monumental given the apparent due diligence conducted by the researching companies. The class-action lawsuit that followed these reports has a Class Period of July 22^nd, 2020 to February 25^th, 2021, with a Lead Plaintiff Deadline of June 1^st, 2021.