Reddit stocks have made waves in 2021. Retail traders have triggered a short squeeze in many stocks like AMC Entertainment and GameStop. While stocks pumped by WallStreetBets have fallen from their peaks, with the exception of AMC, they are still up significantly for the year. Eline Entertainment Group (EEGI) is another Reddit name and it's up 7,300 percent YTD. Is it too late to buy EEGI stock or is this penny name a pump and dump?
The Reddit-driven rally has helped a lot of zombie companies. They raised capital in a frenzy by issuing new shares. However, most of the companies that WallStreetBets pumped had a fundamental story behind them.
What happened to EEGI stock?
EEGI stock looks different from other Reddit stocks. The company doesn’t seem to have any real business. There doesn’t even seem to be a website for EEGI and it hasn’t even filed its financials for the last few years.
Eline Entertainment doesn't seem legit.
Eline Entertainment group doesn't seem legit to me. I could be wrong, but there hasn’t been any public news about the company for years and yet the stock is up sharply over the last year.
Eline Entertainment Group stock forecast
Despite the humongous rally over the last year, EEGI stock trades at less than a penny. The SEC classifies stocks below $5 as penny names. EEGI would fit into the smallest of penny names. Despite having surged almost 740,000 percent over the last year, EEGI's market capitalization is only about $50 million.
None of the Wall Street analysts cover such small companies, so we don’t have a forecast for EEGI stock.
EEGI stock doesn't look like a good investment.
EEGI stock does not seem like a good investment to me. With no publicly available information on the business or the earnings, it’s not possible to build a case for this penny stock.
Should you buy Eline Entertainment stock?
Eline Entertainment doesn't look like a buy to me. The stock has been rising due to rumors floating on social media forums. Ideally, investment decisions shouldn't be based on such rumors, especially when it’s about a micro-cap company that hasn’t even filed its financials for years.
Is EEGI a pump and dump?
EEGI could very well be a pump and dump scheme. There are rumors and discussions on social media about a streaming event from the company on May 28. Some people speculate that the company might even file its financials. However, the rumors haven't been confirmed or denied.