Chinese e-commerce firm Onion Global's stock snaps 11-session downturn

Jun. 22, 2021 7:06 PM ETOnion Global Limited (OG)OGBy: Jerry Kronenberg, SA News Editor

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  • Chinese e-commerce platform Onion Global (NYSE:OG) fell to less than half of its recent IPO price intraday Tuesday before rebounding and ultimately finishing 10.7% higher for the day – snapping an 11-session downturn.
  • OG sank to as low as $3.37 a share intraday, off 12.5% for the session and 53.5% below the $7.25 a share that its initial public offering had priced at last month.
  • However, the stock’s fortunes then turned around and OG ended up rallying back to a $4.26 close. That’s nearly 11% above Monday’s finish, although still more than 40% below the company’s IPO price.
  • Onion Global operates O’Mall, a popular e-commerce platform that sells fast fashion, beauty goods and other items aimed at young consumers in China and other Asian countries.
  • Still, OG shares have more or less struggled ever since the company’s IPO last month priced at the bottom of its expected $7.25-$9.25/share range.
  • The stock briefly shot up to $11.71 on its first trading day, but fell back to end the session at $7 – down 3.4% from OG’s IPO price. Shares have by and large only fallen from there, never closing above either their $7.25 IPO price or even their $7 first-day finish.
  • Onion Global has been sinking despite little apparent news other than weak Q1 results released on June 10.
  • On the plus side, the company remains profitable, reporting 8.9M yuan ($1.4M) of net income attributable to ordinary shareholders for the latest quarter. However, that represented an 83.9% drop from Q1 2020’s net income attributable to ordinary shareholders.
  • OG attributed the weaker results to an unusually strong Q1 2020 that benefited from strong sales of disinfecting products and consumer stockpiling of goods early on in the COVID-19 outbreak.
  • Seeking Alpha contributor Donovan Jones recently analyzed the stock and concluded that “for investors seeking exposure to the fashion-forward e-commerce industry in China, OG could be a good entry possibility and is worth a close look.”

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