What's Going On With Motorsport Games Stock?

Motorsport Games Inc MSGM shares traded higher by more than 700% on Tuesday before adding a more than 200% gain in premarket trading Wednesday morning. The stock retreated just ahead of the open after the company announced an offering.

What To Know: Following a massive move in the low-float stock this week, Motorsport Games entered into a definitive agreement for the issuance and sale of 183,020 shares at a purchase price of $21.40 per share in a registered direct offering.

The gross proceeds from the offering are expected to be approximately $3.9 million.

What Sparked The Rally? On Monday, Motorsport Games entered into a debt-for-equity exchange agreement with majority stockholder Motorsport Network LLC to repay $1 million in debt under a $12 million line of credit. The news sparked a major surge in the stock.

"This debt exchange benefits our balance sheet, allows us to pay less interest expense and will help Motorsport Games to pursue product development and growth opportunities," Dmitry Kozko, executive chairman and CEO of Motorsport Games, said at the time.

Late Monday, shareholder Mike Zoi also disclosed the purchase of 338,983 shares at an average price of $2.95, per a regulatory filing with the SEC.

Did You Know Benzinga Tracks Insider Trading? Check This Out: Recent Insider Trading Activity

Motorsport Games' average session volume is below 1 million, according to Benzinga Pro. Tuesday's session volume was just shy of 50 million and Wednesday's trading volume is already approaching 10 million in early trading.

The stock has been trending across social media platforms for the last two days. It was the top trending ticker on Stocktwits at publication time.

MSGM Price Action: Motorsport Games shares closed Tuesday up 713.7%.

The stock is up another 72.9% in Wednesday's session, trading at $36.99 at the time of writing, according to Benzinga Pro.

Photo: courtesy of Motorsport Games.