When it comes to companies in the service sector, nothing is a bigger boost than the signing of a new lucrative contract, so it’s no surprise that PIXY stock is soaring today after ShiftPixy Inc (NASDAQ:PIXY) made such an announcement.
Investors Cheer the News
The staffing service company announced that it had not only managed to complete a recapitalization effort but also managed to bag a new contract. The double boost has naturally been welcomed by the market, and PIXY stock has gained more than 165% since, making it a strong contender as a stock to watch throughout the rest of the week.
ShiftPixy revealed that as much as 60% of the contracted book has been assigned for $20 million and the latest contract is going to help the company to fully fund its own operations. It expects to achieve breakeven status in terms of cash flow by the middle of 2020.
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Scott Absher, the Chief Executive Officer of ShiftPixy, said of the company’s recapitalization efforts: “We decided to monetize a portion of our business that is not critical to our HRIS platform growth initiatives or has limited ‘upsell’ opportunities.”
PIXY stock is now up 165.50% at $21.42.
The recapitalization effort from the company is a significant development as it tries to rebound as a business and get back on an even keel. Absher also stated that with the additional capital, the company is going to focus on those segments of the business that have proven to be more lucrative. ShiftPixy is focused on rebuilding its business books completely over the course of the coming months, and investors should do well to keep an eye on the development.
While the present rally is a welcome relief for investors, it should be noted that there was a 1 to 40 reverse split last month, and PIXY stock has lost as much as 70% over the past year.
Featured image: DepositPhotos © poznyakov
