Small capital that many investors may not have, Guardforce AI (NASDAQ:GFAI), take off today. At the moment, GFAI stock has accelerated over 50% higher at the time of writing, in very large volumes.
For investors in this leading provider of security solutions, a difficult few months have passed. Officially, GFAI shares went public in September of last year, raising $15 million at $4.15 per share. However, the shares fell as low as $1.01 yesterday, reaching all-time lows. Today’s rebound lifted GFAI stock to nearly $1.60, still representing a loss of more than 60% for investors who bought into the IPO. However, positive momentum is positive momentum.
Let’s dive into the reasons why GFAI stock is soaring today.
GFAI Inventory Rise with Geographic Expansion
Guardforce AI today announced that the company will enter the “robots-as-a-service” business, through the acquisition of two companies. These companies, Shenzhen Keweien Robot Service Co., Ltd (SZ) and Guangzhou Kewei Robot Technology Co., Ltd. (GZ), major players in AI services for robotics. Companies aim to use automation to reduce corporate repetitive tasks. Accordingly, investors appear to like the synergies this transaction can provide, as they are bidding for GFAI shares today.
Reports suggest this will be a mostly stock deal, with 10% of the proceeds paid out in cash. The deal is valued at $10 million and is due to be completed sometime next month.
Notably, this transaction is reported to take place at approximately 0.55 of the five-year yields of the combined SZ and GZ entities. In this kind of assessment, investors seem to like the potential upside with this integration.
At the date of publication, Chris MacDonald did not (directly or indirectly) hold any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author, and are subject to InvestorPlace.com’s posting guidelines.
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