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Newegg Commerce Inc. (NASDAQ:NEGG) shares skyrocketed over 22% in Wednesday’s session, extending a volatile run that has seen the stock swing dramatically this year. The surge came as the company expanded its stock sale program, addressed issues tied to a shareholder loan foreclosure, and added its chief executive to the board while insider share sales continued.
The company said its board’s Pricing Committee approved the sale of an additional 500,000 common shares on Aug. 17 under a $65 million Sales Agreement with Needham & Company. Newegg had already raised $29.3 million in gross proceeds by selling one million shares in mid-July. The company may adjust the number of shares sold depending on available authorizations.
Fred Chang, Newegg’s second-largest shareholder, defaulted on loans backed by nearly two million pledged shares. East West Bank foreclosed on about 660,000 of those shares in June and is pursuing another 100,000 to cover roughly $6.5 million owed by Chang’s affiliate, Tekhill USA LLC.
Also Read: Newegg Commerce (NEGG) Stock Hits 52-Week Highs: What’s Driving The Momentum?
Following Chang’s resignation from the board in July, shareholders elected CEO Anthony Chow on Aug. 9 to fill the vacancy. Chow has led the company since 2020 and holds an Executive MBA from UCLA’s Anderson School of Management.
Separately, insider filings show Yong Feng Hou, also listed as Montaque Hou, disclosed the planned sale of 150 shares valued at about $13,200 on Aug. 20. He has regularly sold small blocks of stock this month, with Fidelity Brokerage Services acting as broker.
The stock has also attracted short sellers. Former pharmaceutical executive Martin Shkreli recently said he was betting against Newegg after its rally of more than 1,300% this year, calling it “close to worthless.” Read more on that development here.
Wednesday’s rally pushed NEGG closer to its 52-week high of $133.00, far above its low of $3.32. The stock is trading roughly 173% above its 50-day simple moving average and more than 580% above its 200-day.
Price Action: NEGG shares were trading higher by 22.61% to $109.61 at last check Wednesday.
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