The story of MicroCloud Holograms is a peculiar one. We often hear tales about people who preceded the future and invented premature technologies that would have made a fortune if invented and commercialized a few years later. So maybe MicroCloud Holograms (HOLO) should fall under the same category, and perhaps the problem is that the company is firing off its patents at 360 degrees and hoping one will reach a target instead of focusing on one or a few developments.
Don't Miss our Black Friday Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
MicroCloud operates in the holographic sector and has 183 patents and another 1,695 holographic copyrights. Two of its most valuable products are Holographic Lidar Solutions for automotive cars, and its digital twin technology, which captures shapes and objects in 3D holographic form.
It is considered one of the most innovative companies in the holographic realm, with some of its products seeming to be taken straight from the future. Yet, the company is trying to avoid delisting from Nasdaq after its stock has shrunk 99% of its value in the past year and trades at $0.25.
Our writer at Tipranks, Casey Dylan, has written extensively on the matter, and you can read about it here.
For now, however, here are 3 challenges MicroCloud Holograms is now facing:
- Stock Value Decline: As mentioned above, MicroCloud Hologram’s stock has declined by over 99% in the last year, from a high of $129 per share to just $0.25. Also, the company has recently approved a 1-for-20 reverse stock split to regain compliance with Nasdaq’s minimum bid price requirement. The reverse stock split is set for October 9th. This act will ease the financial burden in the short term, but it signals financial instability and can further dampen investors’ confidence.
- Potential Delisting: The company risks delisting from Nasdaq due to its stock consistently closing below the minimum bid price. It has until February 2025 to correct this issue or risk delisting. The reverse split has been set exactly for this reason: to gain more value for the stock. The question is, how do you improve stock performance when investors’ sentiment is lacking?
- Financial Instability: Despite reporting an increase in total assets, from RMB 160.6 million to RMB 779.6 million over the past six months, the company’s liabilities have also risen significantly from RMB 19.4 million to RMB 58.8 million. This instability is another reason why HOLO will find it difficult to sustain operations and invest in future growth.
Summary
MicroCloud Holograms is a company with great innovations and viable products. However, due to its financial instability, it’s now at risk of delisting from Nasdaq and faces considerable challenges. If HOLO wants to stay on the Nasdaq, it will need the same creativity in its financial and organizational aspects, as it shows in its registered patents.
