In recent trading activity, Milton C. Ault III, a significant shareholder of Algorhythm Holdings, Inc. (NASDAQ:RIME), has sold shares of the company's common stock. The transactions, which took place on October 2nd and 3rd, involved the sale of 7,230 shares, resulting in a total of approximately $3,376.
The sales occurred at varying prices, with the range for the October 2nd transaction being between $0.4551 and $0.4851 per share, and the October 3rd transaction ranging from $0.4509 to $0.4948 per share. The volume-weighted average sale prices for the respective dates were $0.4686 and $0.4647. Following these transactions, Ault's directly owned stake in the company decreased, but he still indirectly controls a substantial number of shares through Ault Lending, LLC, a subsidiary of Hyperscale Data, Inc.
Investors may take note of these transactions as they reflect the trading behavior of significant shareholders. The sales were conducted in the open market, and Ault has agreed to provide detailed information about the sales upon request by the SEC staff, Algorhythm Holdings, or its shareholders.
Algorhythm Holdings, Inc., formerly known as Singing Machine Co Inc, operates within the phonograph records and prerecorded audio tapes and disks industry. The company's stock is publicly traded, and these transactions are disclosed as part of the regulatory requirements for insiders and major shareholders.
In other recent news, The Singing Machine Company, known for its consumer karaoke products, has completed the acquisition of SemiCab, an AI technology firm specializing in logistics. With this acquisition, the company introduced its new holding company name, Algorhythm Holdings, and announced a shift in its business model towards investments in AI-driven technology companies. Algorhythm is now facing a potential delisting from The Nasdaq Capital Market due to failure to meet the exchange's minimum bid price and stockholders' equity requirements. The company is actively exploring options to regain compliance and avoid delisting.
In an effort to transform into a more technology-driven, asset-light, and higher-margin entity, Algorhythm has announced a strategic shift towards the automotive and connected TV sectors. This move follows the integration of karaoke microphones into Tesla (NASDAQ:TSLA)'s North American models and plans to focus on WiFi-enabled models by 2025. Despite a decrease in net sales and gross profit, the company remains optimistic about its new direction. These are among the recent developments for Algorhythm Holdings, formerly known as The Singing Machine Company.
InvestingPro Insights
Recent insider sales by Milton C. Ault III at Algorhythm Holdings, Inc. (NASDAQ:RIME) align with several concerning trends revealed by InvestingPro data. The company's financial health appears precarious, with a market capitalization of just $4.73 million and a negative P/E ratio of -0.53 over the last twelve months as of Q2 2024. This suggests the company is not currently profitable, which is confirmed by an InvestingPro Tip indicating that RIME has not been profitable over the last twelve months.
The stock's performance has been particularly weak, with InvestingPro data showing a one-month price total return of -30.59% and a one-year return of -55.42%. This aligns with another InvestingPro Tip stating that the stock has fared poorly over the last month and that its price has fallen significantly over the last year.
Moreover, RIME's revenue growth is concerning, with a -45.07% decline in the last twelve months as of Q2 2024. This negative trend is coupled with an InvestingPro Tip warning that the company is quickly burning through cash, which could explain the insider's decision to sell shares.
For investors seeking a more comprehensive analysis, InvestingPro offers 12 additional tips for RIME, providing deeper insights into the company's financial situation and market position. These additional tips could be particularly valuable given the stock's recent performance and the insider selling activity.
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