This Penny Stock Almost Doubled on Plans to Buy Bitcoin and Ethereum. Should You Buy Its Shares Now?

Core Insights - Cryptocurrency-linked penny stocks are experiencing significant trading activity, with small-cap firms adopting treasury strategies involving Bitcoin and Ethereum to attract investors [1] - Mogu, a Chinese online fashion company, has announced a plan to invest $20 million into Bitcoin, Ethereum, and Solana, positioning itself as a digital asset treasury stock [2][3] - Mogu's stock surged over 75% following the announcement of its crypto treasury strategy, transforming it into a "digital asset treasury" play [4] Company Overview - Mogu's recent pivot to cryptocurrencies comes amid challenges in its core business, reporting approximately RMB141.2 million ($19.5 million) in revenue for the fiscal year ending March 31, 2025, a decline of nearly 12% year-over-year [6] - The company reported a net loss of RMB62.6 million ($8.6 million) for FY2025, an increase from RMB59.3 million the previous year, with an operating loss widening to RMB101.1 million ($13.9 million) [7] - Mogu's gross merchandise volume (GMV) fell nearly 29% in the second half of FY2025 compared to the same period last year, attributed to increased competition and weaker user engagement [7]