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SoundHound AI Stock Tumbles: Opportunity or Risk?

Bryce TuoheyAvatar
Written by Bryce Tuohey Reviewed by Tim Sykes Fact-checked by Matt Monaco
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SoundHound AI Inc. faces downward pressure amid challenging market conditions and emerging competitor threats, as the company’s stock has been trading down by -7.91 percent on Monday.

Market Buzz

  • After a whopping 20% increase previously, the latest session ended on a down note with a near 1% dip, leaving analysts scratching their heads.
  • Director Lawrence Marcus offloaded 20,000 shares, pocketing $409,436, but he still holds a hefty stack of shares indirectly.
  • Key insider activity continues as SoundHound AI’s man at the helm, Keyvan Mohajer, shed around 277,482 shares for over $5.61M, reducing his direct holdings.
  • Chief Product Officer James Ming Hom joined the list of sellers, cashing in on 58,382 shares and reducing his stack to around 754,811 shares.
  • COO Michael Zagorsek also spotted in the selling ring, parting with 416,719 shares for a sizable $8.35M, leaving many wondering about insider confidence.

Candlestick Chart

Live Update At 14:32:20 EST: On Monday, January 13, 2025 SoundHound AI Inc. stock [NASDAQ: SOUN] is trending down by -7.91%! Discover the key drivers behind this movement as well as our expert analysis in the detailed breakdown below.

Recent Earnings Snapshot

As millionaire penny stock trader and teacher Tim Sykes, says, “There is always another play around the corner; don’t chase just because you feel FOMO.” This is especially relevant for traders who are constantly on the lookout for the next big opportunity. The stock market can be overwhelming with its rapid changes and the pressure to act quickly. However, Sykes’ advice serves as a reminder to take a step back and analyze each trading opportunity carefully rather than making impulsive decisions driven by fear of missing out.

The numbers paint a vivid picture, one that turns heads. SoundHound AI booked $45.87M in revenue, yet profitability challenges showcase a tale of losses and more losses. The company’s EBIT margin stood at a staggering -162.5, while net income continued in red at -$21.75M. Pulling down its profitability figures sharply, the company’s gross margins shine at 60.7%, indicating every dollar of sales still holds some value. In terms of liquidity, the current ratio seems comforting at 2.6, suggesting the company can cover its short-term obligations.

More Breaking News

The stock, a pupil of volatility, opened 2025 above 13, only to cascade downwards in a zigzag fashion. Those trading waves highlight a story of uncertain investor sentiment amidst mixed insider stakes.

Deeper Dive into Insider Selling

Insider Transactions on the Radar: A shareholder bonanza, or a signal of caution? The selling spree by various insiders is familiar practice during surges. True, however, these transactions sometimes reveal whispers of sentiment among those closest to the company’s pulse. Each sale, a narrative of timelines, raises queries not just on immediate prospects but on the confidence in longer-term value growth.

Leadership Decisions & Market Sentiment: When big names like Lawrence Marcus and Keyvan Mohajer place their bets elsewhere, markets tend to listen. Are these mere strategic financial decisions, or do they indicate a lack of faith? Furthermore, with the recent cluster of insider sales, investors are abuzz, seeking clarity on future forecasts.

Performance Metrics and Speculative Insights

The Profitability Conundrum: As the numbers tumble into negative territories, elements like SoundHound’s impressive gross margin signal potential, yet persistent operating inefficiencies lurk beneath the surface like underfoot water on a seemingly sturdy dock. With a burgeoning price-to-sales ratio of 77.41, some might argue it’s holding value too high for its revenue flow.

Strategizing Around Market Perceptions: The volatility exhibited in recent trading days speaks to a rollercoaster of emotion in the market. Watching the course of SOUN is akin to a dance with predictive analytics, ever hopeful of seeing a turnaround. The euphoria of past increases now meets with tempered expectations. The data trajectory implies speculative buying, as some brace for what could be a case of short-term correction rather than long-term decline.

Conclusion: Weighing the Options

SoundHound finds itself at another crossroads. Its swings and insider activities weave a narrative that demands patience and careful observation. As millionaire penny stock trader and teacher Tim Sykes says, “Preparation plus patience leads to big profits.” For those pondering investment, it’s an intricate chess match of analysis, sprinkled with a dash of speculative intrigue. The question remains—will SoundHound rise like Lazarus, or are the insider actions the harbingers of diminished horizons? Either way, traders and analysts must realize that time will tell as one contemplates the continuum of finance’s volatile dance.

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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

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Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”