ATA Creativity Global (NASDAQ: AACG) is screaming for the top in the market this morning. However, if you’re looking for news, you’ll be hard-pressed to find anything. There have been no press releases or SEC filings since December of last year.
So, what’s the deal?
It seems as though retail investors are latching onto the stock. Here’s what’s going on:
Skip to What You Want to Read
- Retail Investors Are Sending ATA Creativity Global Up
- What Is ATA Creativity Global
- Risks to Consider Before Buying AACG Stock
- Final Thoughts
Retail Investors Are Sending ATA Creativity Global Up
Over the past couple of weeks, thanks to a war waged on hedge funds by a Reddit group known as Wall Street Bets, the strength of retail investors has become abundantly clear. When retail investors band together and make moves in the market, well, they make the market move.
That seems to be what’s happening today.
While AACG stock doesn’t trade with heavy short interest, the fact of the matter is that it normally doesn’t trade much at all. Moreover, the public float on the stock is under 10 million. That’s incredibly tiny, meaning that the supply of shares on the market is minimal.
With the stock recently trading near support, retail traders started to jump in. Well, it didn’t take much to tip the scales in terms of supply and demand. Keep in mind, there are under 10 million shares in the public as we speak.
As demand started to head up, the stock started to tick up in a big way, leading to more investors taking note of what’s going on and further gains.
Based on the fact that we’re seeing quite a bit of message volume on social media, and the float at AACG is so incredibly small, the gains seen on the stock so far may just be the tip of the iceberg.
What Is ATA Creativity Global
ATA Creativity Global is a Chinese education company, focused on combining technology through education and fostering creativity among students.
AACG offers a wide range of educational services, but its most important services include portfolio training, travel education, and overseas study counseling.
So, essentially, the company is focused on teaching through travel.
Risks to Consider Before Buying AACG Stock
If you’re thinking about investing in AACG stock, it’s important to consider the risks before you dive in. After all, there’s no such thing as an investment without the risk of loss. When it comes to AACG, the most significant risks to consider include:
- Penny Stock. AACG is a penny stock. Like most other penny stocks, the company’s business model hasn’t been fully proven and it doesn’t generate a profit. Moreover, penny stocks are known for heavy levels of volatility, making entrance and exit decisions difficult and opening up the door to potentially significant losses to take place quickly.
- Emerging Markets. Emerging markets are exciting investments, but they’re also risky. Emerging economies often hit roadblocks that lead to pain across the economy, and result in losses for investors.
- Education. The education industry can be an overwhelmingly profitable one, but it can also be very tough to break into. With vast competition, AACG is a very small fish in a very big pond.
While there are risks to consider, the fact that interest is centered around ATA Creativity Global is impossible to refute. Retail investors are jumping all over a stock with an ultra-tiny public float. It’s like a match made in heaven that could lead to extreme gains, far and beyond what we’ve already seen in the premarket. All in all, this could be a massive opportunity.