Shares in Luokung technology (NASDAQ: LKCO) pulled back today after the Chinese mapping technology company’s first-half report indicated it could face a cash crisis. The Luokung share closed the day down 10.4%.
The company posted revenue of $ 37.8 million for the first half of the year, compared to $ 7.3 million supported by the acquisition of eMapGo Technologies, a navigation and map services provider and an innovator in autonomous vehicle technologies became.
Net loss increased from $ 18.9 million to $ 26.7 million for the period and was unchanged at $ 0.09 per share.
CEO Xuesong Song recognized the growth of the business with the performance of the company’s location-based services business, adding $ 24.5 million in revenue. He added, “During the reporting period, Luokung expanded its partnership base and began delivering our world-class portfolio of products and services to leading companies in a variety of defense industries.”
Luokung stock has been very volatile throughout the year due to the challenges in China and the market’s own doubts about the Chinese little hat Tech company that was previously on the Pentagon’s entity list, meaning it was well on its way to being removed from the list Nasdaq.
The sell-off could be a reaction to the company’s weak balance sheet as it only has $ 14.5 million in cash, which won’t be enough to keep the business running for long considering it’s one in the first half of the year Loss of $ 26.7 million recorded year. It also had just $ 30.6 million in short-term assets versus $ 81.8 million in short-term liabilities, so the company needs a cash injection to pay its bills.
Luokung raised $ 32.8 million in a direct offer in September, which should give investors some confidence. However, it’s understandable why the market is suspicious of shaky financial conditions in a Chinese stock.
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