GFAI Stock Warning: Why is Guardforce AI rising today?

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Micro-capitalized stocks may not be on the radar of many investors, Guardforce AI (NASDAQ:GFAI), take off today. Currently, GFAI shares were up more than 50% higher at the time of writing, at an extremely large volume.

Source: Phonlamai Photo / Shutterstock.com

It has been some difficult months for investors in this leading provider of security solutions. Official GFAI stock went public September last year and raised $ 15 million at $ 4.15 per share. However, shares fell to $ 1.01 yesterday, hitting all-time lows. Today’s recovery brings GFAI shares to about $ 1.60, which is still more than a 60 percent loss for investors who bought on an IPO. However, a positive start is a positive start.

Let’s delve into what drives GFAI stock growth today.

Movement of GFAI shares due to geographical expansion

Today, Guardforce AI announced that the company will enter “robotics as a service” business, by taking over two companies. These companies, Shenzhen Keweien Robot Service Co., Ltd. (NW) and Guangzhou Kewei Robot Technology Co., Ltd. (GZ), are key players in AI robotics services. Businesses plan to use automation to reduce repetitive tasks for businesses. Accordingly, investors seem to like the synergies that this deal can provide, as they are teasing GFAI shares today.

Reports indicate that this will be mostly a stock deal, with 10% of the proceeds going to be paid in cash. The deal is valued at $ 10 million and is expected to be completed sometime next month.

In particular, reports show that this business is being carried out at about 0.55 of five-year revenue merged the subjects of SZ and GZ. In this kind of evaluation, investors seem to like the potential advantage of this integration.

At the time of publication, Chris MacDonald did not hold (directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the author and are the subject of InvestorPlace.com Guidelines for publication.

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