Shiftpixy Inc (NASDAQ: PIXY) stock was up 43% last night post market and is now up 82% this morning. That’s – clearly – a significant move in that stock price. At pixel time there’s nothing on Edgar or the wires, the last results were in early December. Quite what is happening is therefore up for grabs.
That makes Shiftpixy a trading opportunity of course for price moves like this – and in volume too, daily volumes here are 20 million and more – don’t happen just because. There’s always a reason, the task is to find out what is the reason.
This also ties in with that general advice to buy the rumour and sell the fact. Not that that always works, that’s not the point of the saying. Rather, when something is felt to be imminent then prices can run riot. The actual news of what it is might not be as exciting as the dreams of what it might be. Prices can thus fall back even after the delivery of good news as that was already discounted in the speculations of what the news will be.
It’s certainly true that some good news at Shiftpixy would be nice. Since the IPO in 2017, the price has been as high as $370 and today’s $2 or so is pitiful in contrast. It is possible to point out that Shiftpixy hasn’t been well treated by the pandemic. Concentrating on gig economy working in the restaurant and hospitality sectors wasn’t going to go well in lockdown.
But the slide started well before covid. The base idea seems reasonable enough. There is a shi9ft to gig working, restaurants and hospitality use a lot of shift and short term workers. Being the marketplace in which all that sorting of shifts and hours and workers and places happens has a superficial appeal.
On the other hand the details of the business might not work quite so well. Every place does things differently. Plus, a large portion of the staff in the business sector are front of house – the people who actually interact with the customers. They might not be the people you, as an employer, might want to pick up anonymously off an app. And if people want to see folks, see how they look, then that rather short circuits the entire process of running it all through an app. Hiring a waitress just isn’t the same as taking on a delivery boy now, is it?
The other part of the Shiftpixy business is offering to do all the HR and payroll work as well as the actual gig placements. That sector – of course – also took a hit in lockdown given the sector being concentrated upon.
Which way the Shiftpixy price will move now depends upon two further things. What is the rumour of news and then what is the actual news when it arrives? Current speculation is exciting, with those sorts of price moves, but it is rather operating in the dark.
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Tim Worstall is a freelance writer specialising in economics and the financial markets.