PIXY Stock Price: 21.05% Increase Explanation

By Amit Chowdhry ● Jun 5, 2021
  • The stock price of  Inc (NASDAQ: PIXY) increased by 21.05% yesterday. This is why it happened.

The stock price of ShiftPixy Inc (NASDAQ: PIXY) increased by 21.05% yesterday as it went from a previous close of $2.85 to $3.45. Investors appear to have responded positively to an SEC filing from the company. 

A group of selling shareholders of ShiftPixy may offer and resell (i) up to 2,320,000 shares of Common Stock and (ii) up to 7,824,328 shares of Common Stock issuable upon exercise of warrants, including pre-funded warrants and warrants issued by the Registrant to A.G.P./Alliance Global Partners and its affiliates for compensation as placement agent in connection with the transactions acquired by the selling shareholders under the Securities Purchase Agreement, dated May 13, 2021, by and among the company and the investor listed therein and the Placement Agent Agreement, dated May 13, 2021, by and between the company and A.G.P./Alliance Global Partners.

The company may receive up to approximately $12.66 million in aggregate gross proceeds from cash exercises of the warrants, based on the per-share exercise price of the warrants. And any proceeds the company receives from the exercise of the warrants will be used for working capital and general corporate purposes, including in connection with activities related to their sponsorship of the Special Purpose Acquisition Companies (SPACs). The holders of the warrants are not obligated to exercise their warrants, and the company cannot predict whether holders of the warrants will choose to exercise all or any of their warrants.

Sponsorship of SPACs

On April 29, 2021, the company announced its sponsorship through its wholly-owned subsidiary ShiftPixy Investments of 4 SPAC initial public offerings. Three of the SPACs are each seeking to raise $250 million in capital investment to acquire companies in the light industrial, healthcare, and technology segments of the staffing industry and the fourth SPAC is seeking to raise $500 million in capital investment to acquire one or more insurance entities. 

The company anticipates that, through its wholly-owned subsidiary, it will own approximately 20% of the issued and outstanding stock in each entity upon their IPOs being declared effective and consummated, (which is likely to decrease over time), and that each will operate as a separately managed publicly traded entity following the completion of their respective initial business combinations, or “De-SPAC”. 

The company anticipates entering into service agreements with each of the staffing entities that will allow them to participate in ShiftPixy’s HRIS platform. And ShiftPixy also expects to facilitate the procurement of workers’ compensation, personal liability, and other similar insurance products for these staffing entities through their anticipated relationship with the insurance SPAC after it completes the De-SPAC process.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.