China XD Plastics Company Limited (CXDC) declined 21.82% in after-hours on Tuesday, August 03, 2021, and closed at $0.73 per share. in the regular trading session of Tuesday, CXDC’s stock gained 152.65%. The stock volume remained 43.02 million shares, which was higher than the average daily volume of 1.12 million shares within the past 50 days. CXDC shares have fallen 19.83% over the last 12 months, and they have moved up 126.77% in the past week. Over the past three months, the stock has lost 11.43%, while over the past six months, it has shed 16.22%.
Let’s see is there any reason behind its exceptional surge on Tuesday?
CXDC received notice from Nasdaq
On May 27, 2021, China XD Plastic Company Limited (CXDC) received a letter from the Listing Qualifications Department of the Nasdaq Stock Market notifying the Company that it was not in compliance with requirements of Nasdaq Listing Rule 5250(c)(1) as a result of not having timely filed its Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2021, and because the Company has not yet filed its Annual Report on Form 10-K for the fiscal year ended December 31, 2020.
Class Action Suit Against CXDC
On March 2, 2021, Squitieri & Fearon LLP filed a class action seeking to represent stockholders of China XD Plastics Company Limited (CXDC) purchased its stock before September 30, 2020.
According to the law firm, China XD and certain of its officers violated the Securities Exchange Act of 1934.
The complaint alleges that, throughout the Class Period, defendants violated the federal securities laws by disseminating false and misleading statements to the investing public and/or failing to disclose adverse facts about the Company’s business, operations and prospects.
Specifically, defendants engineered the Merger to benefit China XD’s founder Han and the Buyer Group without regard for China XD’s public stockholders. Accordingly, this action seeks, inter alia, to enjoin the proposed closing of the merger and rescinding the vote approving the Merger.
CXDC Q3 2020 financial results announcement
On November 16, 2020, China XD Plastics Company Limited (CXDC) announced its financial results for the third quarter ended September 30, 2020.
Q3 2020 financial highlights
- CXDC reported revenue of US$290.1 million for Q3 2020 compared to US$373.2 million in Q3 2019.
- Gross profit was US$34.6 million in the third quarter ended September 30, 2020, compared to US$60.1 million in Q3 2019.
- Total operating expenses were $44.4 million in Q3 2020 compared to $26.4 million in Q3 2019.
- It suffered a net loss of US$38.0 million basic and diluted loss per share of US$0.56 in Q3 2020 compared to net income of US$17.0 million or basic and diluted income per share of US$0.25 in Q3 2019.
Conclusion
Well, since November 2019, there is no news or development about the company, CXDC did not file its 2020 financial results yet its exceptional surge on Tuesday is a bit strange and had no grounds at all.
