SPO Global Inc (OTCMKTS:SPOM) has been a big winner for investors so far in 2020. Beginning the year at $0.0143, a series of big gains have driven the stock to a $0.4002 high, representing a return of 2,700% in a space of less than two months. An acquisition that SPO Global closed recently has helped put the stock on the radar of many more investors. Consequently, that has added a major catalyst to the stock, which now look poised for a major breakout.
In a short while, we’ll examine why SPO Global (OTCMKTS:SPOM) has become such an exciting stock in the small-cap universe. But before we get into that, here’s a brief profile of SPO Global for the benefit of investor who may be coming across this company for the very first time.
About SPO Global Inc. (OTCMKTS:SPOM)
OTCMKTS:SPOM operates as a diversified holding company. Its strategic is purchasing interests in young businesses with a promising future. It provides financing and guidance to assist the businesses to realize their potential. The acquired businesses leverage the low-cost and efficient infrastructure that SPO Global has created to maximize their opportunities.
SPO Global runs two subsidiary businesses, namely Wine on Tap Inc. and Reflective Solutions. Wine on Tap is into the premium wine business while Reflective Solutions sells enterprise software.
In case you are wondering what is behind the renewed investor interest in SPO Global stock, here is everything you need to know.
OTCMKTS:SPOM enters China’s biotech space as the country grapples deadly coronavirus outbreak
OTCMKTS:SPOM recently acquired Gerpang Healthcare Group, a Chinese biotechnology company. Gerpang runs a broad business. Its operates include bio-pharmaceutical research and development, sale of medicines and medical equipment supplies. Additionally, Gerpang develops and sells healthcare software.
The timing of the acquisition of Gerpang couldn’t be more perfect. Gerpang gives SPO Global a foothold in China’s healthcare industry. And this comes at a time when the country is grappling with the outbreak of the deadly coronavirus, which has become a global concern.
The virus that broke out in China’s Wuhan province has already killed more than 2,200 people in the country. Coronavirus spread and infection continue, with infection cases in China alone topping 75,000 as of last count. The coronavirus epidemic poses a huge threat to China’s economy as business activity has slowdown and the government there is doing everything contain the virus.
It is a sad moment for China and the world as the virus spreads to more countries. But for businesses like Gerpang whose products could help in curbing the spread of the deadly virus, this is a situation that could boost the demand for its supplies, hence more sales. And this is one reasons behind the growing investor interest in SPO Global stock.
Gerpang already make big sales. The business generates 1.0 billion yuan ($143 million) in annual sales. Therefore, even a slight sales boost from the coronavirus outbreak could make a big difference for SPO Global’s finances.
SPO Global cleans up its balance sheet, management and boost its intellectual property portfolio
The Gerpang has helped SPO Global achieve a lot with just a single move. For example, the transaction has helped SPO Global to thoroughly clean up its balance sheet by eliminating debt. The merger opened an opportunity for SPO Global to cancel more than $1.2 million in debt through a series of transactions that are favorable to shareholders.
Additionally, the merger has allowed OTCMKTS:SPOM to clean up its management by putting a new set of leaders in charge of the company. What happened specifically is that Gerpang’s leadership team replaced that management team that existed at SPO Global. Notably, Gerpang founder Lu Fengyou now runs SPO Global as chief executive officer. Fengyou is a highly respected business leader with over two decades of experience in pharmaceutical market in China and the region.
Through the acquisition of Gerpang, SPO Global has added more than 10 international and national patents to its intellectual property portfolio. The intellectual assets give SPO Global more potential revenue sources.
OTCMKTS:SPOM has made big moves in recent days. But there is still more room for the stock to rally further. Trading at $0.400 currently, the stock still has a long runway to its 5-year high of $25. The great news is that following the acquisition of Gerpang, SPO Global now has the right catalysts in place to provide momentum to the stock.
We will be updating our subscribers as soon as we know more. For the latest updates on OTCMKTS:SPOM, sign up below!
Disclosure: We have no position in OTCMKTS:SPOM and have not been compensated for this article.