AirMedia Group (AMCN) Stock: Soaring On Strategic Transformation

AirMedia Group Inc (ADR) (NASDAQ: AMCN) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company announced a strategic transformation that is leading to excitement among investors. Today, we’ll talk about the news, what we’re seeing from AMCN, and what we’ll be watching for ahead.

AMCN Gains On Strategic Transformation

As mentioned above, AirMedia Group is having an overwhelmingly strong start to the trading session in the pre-market hours after the company announced a strategic transformation. In the press release, the company said that it is transforming from a traditional airport advertising company to an aviation, railway, and long-haul bus internet service company that is focused on providing a full range of diversified services and internet services for passengers.

In the press release, AMCN said that through its subsidiary, AirMedia Online Group, it has set up a joint venture known as Unicom AirMedia Network Co., Ltd. The joint venture was created with China Unicom as well as another investor. Together they will build out the global network for aeronautical communications and provide in-flight internet as well as other value added services.

Also, AMCN said that on January 9, 2018, the joint venture signed a strategic cooperation agreement to jointly develop the Belt and Road Initiative satellite communications business. This agreement has been signed with European Communication Satellite Corporation.

In order to get all of this rolling on a financial level, AirMedia said that it has entered into an investment agreement through its wholly owned subsidiary, Wangfan Tianxia Network Technology Co. The investment agreement was signed with Beijing Lords Technology Ltd. and will provide $10 million in funding through Tsinghua Tongfang as well as other institutional investors that are working to enter the blockchain sector. In a statement, Mr. Herman Man Guo, Chairman and CEO at AMCN, had the following to offer:

“Today marks a significant milestone as we have entered into a strategic cooperation agreement with China Unicom and step into the blockchain sector with Beijing Lords. The combination of Beijing Lord’s blockchain technology with our impressive customer base gives us the credibility and scale to create a series of disruptive products based on the blockchain technology and stand apart from the competition. Looking forward, we believe the strategic transformation will position AirMedia well for sustainable growth for the years to come as an industry pioneer.”

What We’re Seeing From The Stock

As investors, one of the first things that we learn is that the news moves the market. In this particular case, the news released by AirMedia proved to be overwhelmingly positive. So, it’s no surprise that we’re seeing a strong reaction in the market. Of course our partners at Trade Ideas were the first to alert us to the gains. Currently (9:09), AMCN is trading at $1.51 per share after a gain of $0.30 per share or 24.79% 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 AMCN. In particular, we’re interested in following the story surrounding the transformation of the business and excited to learn more about the revenue this transformation generates. Nonetheless, we’ll continue to follow the news closely and bring it to you as it breaks!

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