Geo Investing first highlighted the relatively unknown nano-cap company in late July after the company entered into an agreement with a Chinese State Owned Enterprise (SOE).
As part of the agreement, a subsidiary of SkyPeople, Shaanxi Guowediuomei Beverage, agreed to sell a 51 percent stake of itself to the SOE, Shaanxi New Silk Road Kiwifruit Group (NSR). The deal would have valued the subsidiary at $100 million, or $25.00 per SkyPeople share.
Geo Investing highlighted the fact that the deal is contingent only "if certain conditions are met."
"When I first read the SPU 8K detailing the share transfer transaction I had a hard time convincing myself that the SOE is going to fork over $46 million," Geo Investing argued. "The game is simple: entice investors with a deal that appears to add legitimacy to a dying ChinaHybrid, but make the deal predicated on conditions that will never be met."
Shares of SkyPeople hit a 52-week high of $20.95 in the days following the transaction announcement. The stock later suffered a steep pull back to the $6.
However, the stock surged 58 percent on Monday, prompting Geo Investing to re-address the issue and speculate that "pumping" is at work again in the stock.
At time of writing, SkyPeople was trading at $8.52, down 10.32 percent on the day.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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