Why Sos Shares Spiked 23% Today

Sos Ltd SOS shares closed over 23% higher on Tuesday after the company said it had installed a second batch of cryptocurrency mining rigs.

What Happened: The China-based emergency rescue services company said it had installed 5,000 cryptocurrency mining rigs.

The installation of the second wave of miners brings the combined mining capacity at Sos to 353 Peta-Hashes per second (PH/s) for Bitcoin BTC/USD and 707 Giga-Hashes per second (GH/s) for Ethereum ETHER/USD. 

Sos also disclosed that, on Feb. 24, it was awarded its first BTC from successful mining activities. BTC traded 8.57% lower at $54,416.66 at press time, while ETH traded 6.62% lower at $1,741.56.

Sos board also announced an independent review of its cryptocurrency mining activities, which involve tracking payments from multiple mining pools to Sos through public blockchains.

Why It Matters: Sos expects to generate 41 BTC and 909 ETH in the first quarter of 2021, as per a statement.

“Our output should grow in future quarters as we receive and install our third batch of mining rigs and have a full quarter of operations for our current rigs," said Sos Chief Financial Officer Steven Li.

Last month, Sos had announced receiving 5,000 pieces of cryptocurrency mining rigs ahead of schedule.

The company’s mining rig seller had at the time confirmed that it had enough inventory to fulfill the next two batches of shipments on schedule.

Price Action: Sos shares closed 23.08% higher at $8.16 on Monday and fell 3.06% to $7.91 in the after-hours trading.