Exela is keeping up its momentum today, with another 10% so far with 10x the usual volume according to Yahoo Finance.
The company is also quickly becoming a short-squeeze candidate as bears and bulls both get on this name. There is resistance at both the $3.70 and $4.50 levels so it’s unclear if this can go much higher.
The WSB subreddit is alive today with traders talking upXELA stock. All of this extra attention has the company’s shares seeing extra trading yet again today. That sort of building enthusiasm could take the stock much higher for a meme stock rally.
There’s now a 70% chance of this occuring. $XELA is still only at $3.60.
Xela Technologies Multi-Day Runner
If you enjoy stock alerts like this one, join Stock Quest here.
Xela ticker $XELA is up 110% in the last month. Could it be the next $MRIN meme stock? There’s an increase in volume and a battle between bulls and bears that suggests it could be, as I mentioned a few days ago.
Yesterday the stock was up another 23%, mostly with a surge in power hour.
After doing an offering of $100 million at the end of June, Xela Tech’s financial situation is much clearer and more promising. $85 million was raised under the $150 million at-the-market equity program launched on June 30, 2021. So now what?
$XELA appears to be trending on meme boards and WSB type traffic in the first week of July, which is 60% likely to be a multi-day runner. The stock was $1.28 on June 18th, and today is $3.29. That’s quite some momentum for a stock whose volatility usually disappoints. But it’s now entering a volume of meme-stock mania.
Xela has room to operate now with $205 million of cash and cash equivalents on hand as of June 30, 2021, not including additional borrowing availability under various credit facilities. They have a new lucrative RPA client in the Healthcare Insurance industry. At a time when the Russell 2000 is under pressure, there are few decent penny stocks to choose from this summer.
Xela has the kind of chart that’s also favored among meme stock pickers. It used to have a huge stock price. This is the $MRIN type of movement. $MRIN so such absurd gains as to inherit the $MVIS trophy for top meme penny stock.
Exela Tech Is As Close to a Value Stock in Micro Cap As You Will Find
According to the data from short interest api, Exela Tech is also likely a beneficiary of the economic recovery. They have a digital foundation in their engineering heritage that powers typically long tenured customer relationships and this is what enables them to continue to innovate and launch new disruptive solutions that further widen their competitive moat, so they claim.
The truth is if this has entered meme stock territory, it doesn’t really matter how much they can regain revenue or how fast.
Xela Tech’s long term finances are also improving. The company plans to use certain proceeds from the equity program to strategically reduce its debt and associated interest expense obligations as well as explore ways to invest in its growth, in line with their previously announced strategic initiatives.
As an initial step, Exela intends to target an annual debt service reduction of $25 million. More offerings are very possible given the multi-year beaten down vibe this company has.
However the late June offering just seemed to delay the inevitable surge of $XELA’s stock. It seems primed for upside also since it has significant bearish action, where a short squeeze is a bit more probable.
We’ve been watching $XELA for about the past 1.5 years, and frankly its new found higher liquidity will likely help it better leverage the already diversified tech pipeline and further enable its business services model by allowing it to fund new growth and revenue streams.
Whether you are looking at fundamentals or meme potential, $XELA has the kind of volatility that’s good for July 2021. I would say $5.50 is a realistic price target for Xela as a peak in July. However expect volatility and a lot of bear vs. bull action.
If you enjoy stock alerts like this one, join Stock Quest here. If you enjoyed this article, please share it with your closest investing buddies.