Cool Holdings (AWSM) Stock: Climbing On Asset Acquisition

Cool Holdings Inc (NASDAQ: AWSM) is having an incredibly strong start to the trading session this morning, and for good reason. The company announced that it has entered into an agreement to purchase an asset. Of course, the news excited investors, pushing the stock for the top. Today, we’ll talk about:

  • The asset acquisition;
  • what we’re seeing from AWSM stock as a result; and
  • what we’ll be watching for ahead.

AWSM Announces Asset Acquisition

As mentioned above, Cool Holdings is having a great start to the trading session this mornign after the comapny announced a planned asset acquisition. The announcement was made via press release early this morning.

In the release, AWSM said that it has entered into a definitive agreement to purchase all outstanding capital stoc of Simply Mac from its parent company, GameStop. Simply Mac is the largest Apple Premier Partner in the United States, operating 43 stores across 18 stores.

The company said that consideration for the purchased will be based in part on the value of inventories and other working capital at the date of closing. Also, it is expected that the transaction will come to a close in early August.

In a statement, Mauricio Diaz, CEO and executive chairman at AWSM, had the following to offer:

This transaction enables us to advance our growth strategy in the Americas as we move aggressively to reach our goal of 200 stores. Upon closing, we will have 59 stores with 46 in the U.S., 6 in Argentina and 7 in the Dominican Republic, and a clear focus on North America, including potential opportunities in Canada.

We are excited to work with the Simply Mac team, because we each bring synergistic strengths to the table that we believe will improve the operating efficiency and profitability of the combined company. We believe our direct relationships with third-party accessory manufacturers can help strengthen Simply Mac’s product offerings and gross margins. Simply Mac’s focus on Apple authorized service and smaller market locations could help us further expand our U.S. presence and improve our existing store efficiencies and product-services mix.

What We’re Seeing From The Stock

One of the first lessons that we learn when we start to work in the market is that the news leads to moves. When it comes to Cool Holdings, the news proved to be overwhelmingly positive.

After all, the asset acquisition will give the company the ability to substantially increase its revenue. So, it’s not surprising to see that excited investors are pushing the stock on a run for the top.

As is just about always the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:42), AWSM is trading at $2.76 per share after a gain of $0.45 per share or 19.48% 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 AWSM. In particular, we’re looking for more details on this transaction when they become available. As is generally the case, the transaction is also subject to customary closing conditions. Nonetheless, we’ll keep a close eye on the story and bring the news to you as it breaks!

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