Why Did SMX Stock Rise More Than 300% in 2 Days?

Financial markets can be unpredictable but every once in a while, a tiny micro-cap stock bursts into life. That’s exactly what SMX (Security Matters) (NASDAQ: SMX) has done: after closing up 141% yesterday, the stock is reportedly further up around 190% in pre-market trade today as per Google Finance. What’s going on and, more importantly, is this surge the start of a real turnaround, or just hype magnified by thin trading volumes?

Let’s break down with this blog what triggered SMX’s sudden 300% jump. And we’ll look at what this surge really says about the company beneath the volatility.

What Is SMX and Why Did the SMX Stock Explode

SMX is a micro-cap company that claims to provide “molecular-marking” technology: a system that embeds a unique molecular signature into metals, plastics, textiles, and other materials, allowing them to be tracked, authenticated and traced through complex supply chains.

On December 4-5, the stock exploded. The primary publicly cited reason: SMX announced that its molecular-marking technology has broad applications for supply-chain transparency and ESG compliance, offering a way to give physical materials a “proof of origin” that survives manufacturing processes. Added to that: SMX recently signed a reportedly large equity purchase agreement worth $111.5 million.

Thus: a combination of hype around a novel technology, a funding boost, and a broader macro environment that favours ESG and verified-materials solutions; all came together to ignite a dramatic short-term rally.

But Here’s Why This Looks Risky and Why SMX Fell 99% in 2025

Any reader of 2025’s SMX chart would be shocked. The market cap of SMX, despite this rally, had already fallen nearly 99% year-to-date, making it one of the worst-performing US equities this year.

The fall was driven by several structural issues: weak financials, a lack of meaningful revenue growth, repeated compliance notices from the exchange, and heavy share dilution through financing rounds.

Even now, publicly available financials show that SMX is not profitable: its latest trailing-twelve-month net income remains negative (on the order of –US$44 million) and it has no meaningful revenue disclosures.

In short: SMX remains a high-risk, high-volatility, speculative small cap, with a business model that has yet to deliver consistent, verifiable financial results.

Frequent Reverse Splits and What That Signals

Another striking detail about SMX is how many times the company has consolidated its shares over the past two years. According to public filings and split-history records, Security Matters has carried out at least six reverse stock splits between 2023 and 2025.

• In August 2023, the company initiated a 1-for-22 reverse split.
• In July 2024, there was a 1-for-75 consolidation.
• On January 15, 2025, another reverse split (35-for-1000) was executed.
• On June 16, 2025, a 4.1-for-1 reverse split (consolidation) was announced.
• On August 7, 2025, yet another 1-for-7 split took place.
• Most recently, in October 2025, SMX carried out roughly a 1-for-10.9 reverse split to again reduce the number of outstanding shares.
• Additionally, on November 18, 2025, SMX implemented an 8-for-1 reverse split, consolidating every eight shares into one.

Reverse splits are typically used to lift a collapsing share price and avoid delisting. In SMX’s case, the frequency and scale of these splits indicate repeated price erosion, governance stress, and a constant struggle to stay compliant with Nasdaq requirements.

It also makes the stock harder to evaluate. Every time the share count shrinks, the per-share price mechanically jumps, which means rallies can look dramatic even when the underlying business hasn’t improved. This is why SMX’s recent spike needs to be seen with caution, not as evidence of a turnaround.

What to Watch Out For with SMX

For investors or observers tracking SMX’s surge, here are the critical points to monitor:

• Revenue & profitability: Does SMX ever deliver real, recurring revenue from actual clients and not just press releases? Without that, high stock valuations remain purely speculative.
• Execution risk and capital needs: With negative EBITDA and a very low current ratio (i.e. short-term liabilities outweigh liquid assets), SMX may need more capital which historically triggered dilution.
• Regulatory & compliance risk: The company previously faced exchange compliance notices; future governance issues or failures to meet disclosure standards could again spook investors.
• Real-world adoption & scalability: Does molecular-marking technology gain meaningful traction among manufacturers, recyclers, or commodity supply chains or remain a niche idea?
• Liquidity and volatility: Given the micro-cap nature and thin float/shares-outstanding, SMX remains highly volatile and gains (or losses) can be swift and dramatic.

Final Thoughts: Stay Cautious, Watch the Fundamentals

SMX’s sudden 190-300% or more move (the volatility is mind numbing) is undeniably eye-catching. The technology it offers; molecular marking, traceability, verifiable provenance does align with real global trends. However, the rally reflects hopes and narratives more than results. Unless SMX begins to deliver stable revenues, transparent governance, and adoption at scale, the stock’s wild swings may continue.

For readers, this is a textbook lesson in speculative small caps: understand the difference between “potential” and “progress”, and treat meteoric rallies not as breakthroughs, but as invitations to dig deeper.

Disclaimer:

The content is meant for education and general information purposes only. Investments in the securities market are subject to market risks, read all the related documents carefully before investing. Past performance is not indicative of future returns. The securities quoted are exemplary and are not a recommendation. This in no way is to be construed as financial advice or a recommendation to invest in any specific stock or financial instrument. Readers are encouraged to verify the exact numbers and financial data from official sources such as company filings, earnings reports, and financial news platforms and to conduct their own research, and consult with a registered financial advisor before making any investment decisions. All disputes in relation to the content would not have access to an exchange investor redressal forum or arbitration mechanism. INDmoney Global (IFSC) Private Limited,Registered office address: Office No. 507, 5th Floor, Pragya II, Block 15-C1, Zone-1, Road No. 11, Processing Area, GIFT SEZ, GIFT City, Gandhinagar – 382355.