Elong Power Holding Limited (NASDAQ: ELPW) saw its shares skyrocket approximately 72% during midday trading on Monday, with volume exceeding 32 million shares, as investors reacted to the expiration of a lock-up agreement covering over 4.2 million shares. The stock opened at $4.56, touched an intraday high of $10.14, and was last seen trading at $7.59, marking a gain of $3.17 for the day.
The lock-up expiration, reported by MarketScreener citing S&P Capital IQ, lifted restrictions on 3,844,867 Class A ordinary shares and 361,090 Class B ordinary shares that had been in place since February 2. Lock-up periods prevent insiders and early investors from selling shares for a set timeframe, and their expiry often raises concerns about increased supply hitting the market. Elong has previously warned in SEC filings that substantial post-lock-up sales—or even the perception they could occur—could depress the stock price and complicate future equity financings.
The event comes on the heels of significant capital-raising and share-structure changes. On February 3, Elong closed a $7.6 million public offering of 2.4 million units at $3.16 per unit, each comprising one Class A share and a warrant with reset terms and a zero exercise price. That zero-exercise feature allowed warrant holders to receive shares without additional cash payment, and by March 9, all 24.955 million warrants from a separate issuance had been exercised, resulting in the creation of 77,764,364 new Class A shares.
Days later, the company enacted an 80-for-1 reverse stock split to boost its per-share price, reducing outstanding Class A shares to approximately 1.4 million and Class B shares to about 4,514. The reverse split was part of an effort to maintain Nasdaq listing requirements. Effective April 1, Elong transferred its Class A shares from the Nasdaq Global Market to the Nasdaq Capital Market, and the exchange subsequently closed two market-value compliance matters following the transfer.
Financially, Elong reported a net loss of $5.57 million on revenue of just $2.05 million for the full year 2025, though that loss narrowed sharply from a $30.11 million deficit in 2024. Revenue was primarily derived from trading and sales of energy storage batteries, reflecting what the company describes as an updated business strategy. However, the balance sheet remains under strain. Auditor Enrome LLP flagged a “material uncertainty related to going concern,” citing negative operating cash flow of $2.66 million and a working capital deficit of $14.0 million at year-end 2025.
Adding to the challenges, Elong sold its subsidiary Elong Power International Co. and related entities for a mere $10,000 in 2025, citing slower growth and rising losses in battery packs, cells, and spare parts. The company now intends to focus on research, development, sales, and service of energy storage systems. Yet it faces intense competition from industry giants such as CATL, BYD, and Sungrow, which could further pressure margins.
Monday’s stock surge appears to be driven more by supply dynamics and liquidity than by any fundamental improvement in operations. With a going-concern warning, a heavily diluted share base, and a refocused but cash-strapped business, investors remain wary of the sustainability of this rally.
