MicroCloud Hologram (HOLO), a tech company specializing in holographic technology and quantum blockchain security, has been in freefall, with its stock plummeting down over 76% year-to-date. To cope with the situation, HOLO has embraced strategies such as proposing investing up to $200 million into Bitcoin, performing a reverse share split to avoid delisting by NASDAQ, and increasing authorized share capital, including a recent successful gain of $40 million through convertible notes, these maneuvers do not address the root of the problem. The question remains whether its innovative ideas can generate revenue before investors completely give up on the company.
Bitcoin and Reverse Stock Split
MicroCloud Hologram is a company dedicated to harnessing holographic technology in software, hardware solutions, and content services. The company’s innovative offerings are applied across various fields, including holographic cloud data processing, smart car technologies, and holographic visual services. Their wide-ranging services target industries such as internet advertising, culture, industrial applications, multimedia, and automotive electronics manufacturing.
MicroCloud Hologram plans to use up to $200 million of its cash reserves, currently at about $257 million, to purchase Bitcoin, other digital currencies, and related derivatives to diversify its capital reserve strategy. This move aims to enhance the diversification and risk tolerance of the company’s overall asset portfolio.
Further, the company recently issued $40 million in unsecured convertible promissory notes with investors to support working capital and general corporate needs. Investors can convert their notes into shares, which could influence shareholder composition.
However, MicroCloud has faced challenges, with its stock price falling severely and risking being delisted from the Nasdaq. Although the company was granted a 180-day compliance period on August 12, 2024, to regain compliance, its stock has continued to and is currently trading just over the $1 threshold.
In an effort to streamline its capital structure and boost its market position, the company has proposed a 40-to-1-share consolidation and an increase in authorized share capital. The decision will be discussed in the Extraordinary General Meeting scheduled for March 24, 2025.
Investors will be watching, hoping the company can reverse its recent fortunes. Yet, it may be in the end that the company’s intellectual property, such as its 183 patents and 1,695 holographic copyrights, is worth more than the company’s ability to generate revenue from them.