Original Article was published first on: FintechZoom
What happened
Shares of Future FinTech (NASDAQ: FTFT) flew higher on Thursday following the company’s announcement of a new joint venture in the United Arab Emirates. As of 12:30 p.m. EST, the stock was up 10%.
So what
Future FinTech was formerly a fruit-juice company called SkyPeople Fruit Juice. Since rebranding, it’s been pursuing blockchain technologies to aid in e-commerce. Its new business announced Thursday is FTFT Capital Dubai, and will be based in Dubai. Future FinTech is partnering for the venture with Shenzhen SOSOB, a provider of real-time price information for cryptocurrencies and other digital assets.
Image source: Getty Images.
It wasn’t overly clear from the press release what FTFT Capital Dubai will do exactly, nor how it will generate revenue. Future FinTech’s CEO simply said it “will serve the digital currency markets.” The company will pay $5.5 million for a 55% stake. For its part, Shenzhen SOSOB will put 80% of its equity interest into FTFT Capital Dubai, making Shenzhen SOSOB an 80%-owned subsidiary of FTFT Capital Dubai.
Now what
Beyond Future FinTech’s $5.5 million pay-in, the news release was light on financial details. Therefore, it’s possible this was not what was driving the stock higher Thursday. Many cryptocurrency-related stocks were on the move, and Future FinTech often follows that crowd. However, it’s clear that the company would benefit greatly from having a new venture like this work out. As of its most recent quarterly report, Future FinTech generated less than $44,000 in quarterly revenue.
Finally, it’s unclear how Future FinTech will finance this deal. Even if $5.5 million seems like small peanuts for a company with a market capitalization of more than $400 million, the company had under $1 million in cash as of the end of its most recent quarter.
10 stocks we like better than Future FinTech Group
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Fintech Zoom Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the ten best stocks for investors to buy right now… and Future FinTech Group wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
See the 10 stocks
*Stock Advisor returns as of February 24, 2021
Jon Quast has no position in any of the stocks mentioned. The Fintech Zoom has no position in any of the stocks mentioned. The Fintech Zoom has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
Original Article was published first on: FintechZoom
Stock Market
