VivoPower International (VVPR): What the Hell Has Happened


Who is that masked man?

A tiny, no name microcap became the top performing stock on the Nasdaq on Thursday, as shares of VivoPower International (NASDAQ:VVPR) soared 225% over less than eight hours’ trading. But who is this mystery stock and what does it do?

Investors monitoring their stock screens on Thursday were treated to an amazing spectacle, as shares of Nasdaq newcomer VivoPower galloped ahead 225% in a single day (Indeed, at one point the shares were up nearly 400%). Despite the exchange’s decision to temporarily “pause” trading intraday, VivoPower held on to most of its gains, and ended up becoming the top-performing stock on the Nasdaq for the day — all of which led investors to ask:

Who the heck is VivoPower anyway? And what do they do?

VivoPower: Who they are

According to the company itself, VivoPower is a “global solar power producer” and “top tier US developer” of solar power projects, with a power portfolio of nearly two gigawatts. Based out of London, England, but listed on the Nasdaq in the U.S., VivoPower partners with investors, suppliers, and local companies to develop, co-own and operate solar power projects around the globe, including in Asia, Australia, the UK, and the U.S.

That word “co-own” is key , by the way. According to VivoPower, the company “owns” 1,884 megawatts of solar generating capacity (and operates 93 MW more). But VivoPower’s ownership comes with an asterisk. The company notes that the majority of its assets are actually owned by a joint venture between VivoPower and privately-held, North Carolina-based solar farm developer Innovative Solar Systems LLC.

VivoPower says it has the right to buy out Innovative’s interest in the JV — but it has not done so yet, and so does not actually own all of its claimed solar generating capacity outright.

VivoPower: What they do

Still, VivoPower does appear to be a real company, at least to the extent that it records real revenues ($46 million over the past 12 months) and posts real losses ($0.05 per share lost over the same period). It’s also growing quickly, with sales up 560% in the most recent semi-annual period.

That growth may be coming at a cost, however. VivoPower posted positive GAAP profits last year, but has seen those profits turn negative this year. It’s unclear whether the company is likely to turn profitable again, however, as no analysts appear to follow the stock.

VivoPower: What’s with the stock

That lack of coverage may be one reason that VivoPower stock shot so high, and so suddenly today. There simply wasn’t anyone on Wall Street, and sufficiently familiar with the company, to tell investors whether the rally was “real” or not.

Meanwhile, with no obvious news items on the wires today to explain the stock’s sudden breakout, it’s a bit of a mystery why investors suddenly fell so in love with VivoPower stock. What we do know is that, with a stock price now up at $4.39 per share, VivoPower stock is now trading back at the valuation it held roughly 13 months ago, in April 2017.

Long story short, the stock made up a lot of lost ground today, in a very short period of time, and for no discernible reason. Whether it can hold onto those gains, or will give them back just as quickly as it reclaimed them, is anybody’s guess.

 

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