Sos Ltd (NYSE:SOS) shares shot up 81.03% in the after-hours trading and the regular session today.
What Happened: The surge comes amid overall strength in the cryptocurrency market following Tesla Inc. (NASDAQ:TSLA) announcing a $1.5 billion investment in Bitcoin (BTC).
The cryptocurrency market has been red hot recently with Bitcoin gaining 30.49% on a seven-day trailing basis and Ethereum (ETH) gaining 10.88% in the same period.
Sos, a Chinese firm focused on emergency rescue services, uses blockchain and other big data technologies to provide marketing and cloud computing services to its partners.
On Tuesday, the company said it had received 5,000 pieces of mining rigs ahead of schedule — five days earlier than the delivery day set by the purchase agreement with the seller.
“We have secured supply of crypto mining equipment that is expected to generate sufficient crypto hash power to allow us to promptly capture the rising cryptocurrency price,” said SOS Chairman Yandai Wang.
What’s Next: Sos’ seller confirmed that there is enough inventory of cryptocurrency mining rigs that they can also fulfill the next two batches of shipments as scheduled.
If these rigs operate as expected, the annual return on investment is projected to be significant — thanks to the current cryptocurrency price movements.
The Chinese company also announced the agreement by several of its accredited investors to exercise certain warrants to buy an aggregate of 23.88 million of Sos American Depositary Shares issued on January 20, at the exercise price of $2 on Tuesday.
The $48 million proceeds would be used to develop the company’s cryptocurrency business in addition to being used for working capital and general corporate purposes.
Price Action: Sos shares closed nearly 59.2% at $6.32 on Thursday and rose 21.84% to $7.70 in the after-hours trading.
Related Link: BNY Mellon Opens Its Doors To Bitcoin And Cryptocurrency Custody