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Why E-Home Household Service Stock Plummeted on Tuesday

What happened

Shares of E-Home Household Service Holdings Limited (NASDAQ: EJH), a China-based platform for booking services like moving, appliance installation, and housecleaning, were slammed on Tuesday. At one point Tuesday, shares were off by as much as 68.5%. As of this writing, the stock was down by 57%.

Though there doesn't appear to be any material news behind the stock's plunge, it has traded with extreme volatility since the company went public earlier this year.

Image source: Getty Images.

So what

E-Home Household Service stock has seen some massive moves recently. On Monday, shares crashed from $29 per share to $11.65 but then recovered to more than $20 at one point during the trading day.

One thing is certain: There has been more selling going on than buying in recent days. Perhaps investors are still struggling to come up with an appropriate ballpark valuation for the stock since it was listed on the NASDAQ in May, a situation that would leave much of the tech stock's trading direction up to short-term speculators.

Now what

Investors should keep an eye out for the company's next financial update. When the company went public, it said that its revenue for the second half of 2020 was up 40% year over year, and that net income for the period had increased 33%.

Can the company keep up its momentum in 2021 and beyond?

It's possible that its shares are down for a reason that has not become clear to the general public. Investors may want to look into whether there may be something going on that is getting overlooked. On the other hand, sometimes shares of small companies like this can make unusual moves.

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


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