Shares of motorsports network company Motorsport Games Inc (NASDAQ:MSGM) rocketed higher by more than 700% on Tuesday and were halted several times along the way. It looks like several developments fueled the buying spree. Here's what you need to know.
What Happened: On Monday, Motorsport Games entered into a debt-for-equity exchange agreement with majority stockholder Motorsport Network LLC to repay $1 million in debt under a $12 million line of credit.
"This debt exchange benefits our balance sheet, allows us to pay less interest expense and will help Motorsport Games to pursue product development and growth opportunities," said Dmitry Kozko, executive chairman and CEO of Motorsport Games.
"This debt exchange also signals the ongoing confidence that our majority shareholder, Motorsport Network, has in Motorsport Games."
That's not the only shareholder with confidence in the micro-cap stock. Late Monday, shareholder Mike Zoi disclosed the purchase of 338,983 shares at an average price of $2.95, per a new regulatory filing with the SEC.
Did You Know Benzinga Tracks Insider Trading? Check This Out: Recent Insider Trading Activity
Tuesday morning, Motorsport Games announced that it received notice from the Nasdaq that it regained full compliance with listing rules, fulfilling the compliance notice it received on Nov. 11.
The extremely low-float stock surged on abnormally-high volume in Tuesday's trading session. Motorsport Games' average session volume is about 135,000, according to Benzinga Pro. Tuesday's trading volume was just shy of 50 million.
The stock is being circled by retail traders. It was among the top trending tickers on Stocktwits at last check.
MSGM Price Action: Motorsport Games shares closed Tuesday up 713.7% at $21.40 before pulling back slightly in after hours.
The stock was hovering around $20.35 at the time of writing, according to Benzinga Pro.
Photo: courtesy of Motorsport Games.