Sharing Economy International Inc. (NASDAQ: SEII) is climbing in the market today, and for good reason. The company announced that its wholly-owned subsidiary has entered into a key licensing agreement. The news proved to be a source of excitement for investors, sending the stock screaming for the top. Today, we’ll talk about:
- The licensing agreement;
- what we’re seeing from the stock as a result; and
- what we’ll be watching for ahead.
SEII Enters Licensing Agreement
As mentioned above, Shareing Economy International is having an incredibly strong start to the trading session this morning after announcing that its wholly-owned subsidiary, Sharing Economy Investment Limited, has entered into a licensing agreement. In a release issued early this morning, the company announced that it has entered into the agreement with Ecrent Capital Holdings Limited with regard to the grant of an exclusive and sublicensable license from ECRENT to SEII to utilize software and trademarks. These software and trademarks will be used to develop, launch, operate, commercialize, and maintain an online website platform in North Korea. In the release, the company said that the license agreement will be valid until December 31, 2023. In return for the license, SEII will pay ECRENT a maximum amount of $1 million upon satisfying the condition precident that the gross profit generated from the corresponding business agreement exceeds the license fee payment, which will be determined at the expiration of the license agreement. In a statement, Tin Chi Chan, CEO at the SEII subsidiary, SEIL, had the following to offer:
The US-North Korea summit appears to have progressed very smoothly, which is extremely good news not only for the populations of these two countries, but for every individual around the globe… We strongly believe that the potential opening of the North Korean market provides a unique opportunity for us to develop both online and offline sharing economy business models in the region that would greatly benefit the North Korean people. Given the limited means of the population, the opportunity to share products and services instead of purchasing them outright can lower the costs incurred and enhance the quality of life of North Korean citizens. By establishing ECRENT along with other offline sharing economy solutions at the appropriate time, North Korean users will have the convenience of sharing and renting from each other. We are dedicated to improving the quality of life of the people living there and looking forward the longer-term opportunities in the region.
What We’re Seeing From The Stock
As investors, one of the first lessons that we learn is that the news moves the amrket. In the case of Sharing Economy International, the news proved to be overwhelmingly positive. This licensing agreement will likely lead to a revenue generating product. Importantly, the company will not need to pay fees associated with the agreement until the end of it. Therefore, its risk associated with this venture is minimal. So, it’s no surprise to see that excited investors are sending the stock on a run for the top. Currently (10:22), SEII is trading at $4.46 per share after a gain of $0.93 per share or 26.35% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on SEII. In particular, we’re interested in following the story surrounding the company’s continued efforts with regard to bringing this online platform to fruition. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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