Why Lizhi shares are increasing?

Chinese Podcaster Lizhi

Lizhi shares are on quite a run this week and over the past month. Up from near $4 in January to close at $14 and change today. So why is the share price of Lizhi increasing?

Lizhi is the largest podcast platform in China, similar to Spotify or XM / Sirius in the United States. China, having the largest population on the planet should supply the hyper-sonic growth that Lizhi needs to continue its share momentum.

Lizhi has been public for 1 year now and IPO’d at $11 per share. Before this past month, it has done nothing except go down before skyrocketing this week.

So to go back to what we asked earlier, “Why are shares of Lizhi increasing”? Lizhi announced that it has entered into a cooperation agreement with Pop Mart, a Chinese culture and entertainment company, to create a branded podcast channel for Pop Mart on LIZHI Podcast. Not only this, but Hedge Fund and trading algos jumping on the ride pushing the shares higher. Also, keep in mind, the Stock Jockey’s on the Robinhood and WallStreetBets platforms love low priced stocks, have added fuel to the fire.

How High Can Lizhi Shares Trade?

Your guess is as good as ours, however the shares are only $3 higher than the IPO price last year. Compared to other high flying IPOs over this same time period, really not much, roughly 30%. An educated guess based off hypothetical earnings growth, sales, margins, the advancement of the Chinese population into urban cities, potential to grow / expand other offerings and improve their platform would put a realistic valuation of $30-$40 within the next 3-4 years.

Lizhi and China Growth

Podcast growth in China should only grow as the population modernizes and becomes more urban over time. We think Lizhi could branch off into other areas of audio entertainment such as music, audio books and more. Growth opportunities exist where they can monetize offerings with premium services and continue to license their software to car companies; like they’ve done recently with Xpeng Motors. BULLISH LONG TERM

Disclosure: Wall Street Chronicle Editors hold shares of LIZHI and may continue to add or sell at any time now or into the future.