The Mode Global Holdings PLC (LON: MODE) share price rallied 34.6% despite the lack of recent news releases as investor interest in the company’s shares remained high. The rally was primarily driven by positive investor sentiment, given the recent resumption of trading in Mode shares.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.
However, investors should know that Mode Global is in dire financial straits and needs to raise additional funds quickly to continue operating as a going concern. The fintech company revealed that it had defaulted on its convertible loan notes and was discussing a potential extension with lenders.Â
Top Broker Recommendation
- eToro Top stock trading platform with 0% commission – Read our Review
- Admiral Markets More than 4500 stocks & ETFs available – Read our Review
- BlackBull 26,000+ Shares, Options, ETFs, Bonds, and other underlying assets – Read our Review
- IG Top-tier regulation – Read our Review
- XTB UK regulated by the FCA – Read our Review
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY
The company’s shares were suspended from trading on the LSE on 2 May 2023 after multiple delays in publishing its full-year results for the 12 months to 31 December 2022. The company finally published its results and was readmitted to trading on the LSE’s AIM market.
Given the significant funding challenge that Mode Global faces, I would love to see the company announce a fundraising project either by issuing new shares or by taking on more debt to meet its current funding needs and keep operating as a going concern.
However, as we witnessed with the meme stock rally in the United States, retail traders can come in and push the prices of a company with a depressed share price higher despite all the fundamentals indicating that the firm should be trading lower or filing for bankruptcy.
Still, the UK markets did not get the same euphoria around meme stocks as the US markets; hence, we cannot look forward to such a rally despite Mode Global shares showing signs of embarking on a significant rally despite its troublesome fundamentals.
I would adopt a wait-and-see attitude towards Mode Global shares until there is some clarity about the company’s finances. Will the fintech company be able to raise funds to remain afloat, or will it go into administration for lack of funding?
We cannot answer these questions until we get an update from the company about its plans and next steps.
*This is not investment advice.
Mode Global share price.
The Mode Global share price rallied 34.55% to trade at 2.22p, from Friday’s closing price of 1.650p.
YOUR CAPITAL IS AT RISK. 76% OF RETAIL CFD ACCOUNTS LOSE MONEY.