Meten Holding Group Ltd. (METX), a company providing English language training (ELT) services in the PRC, has steadily declined 3.17% in premarket and was trading at $0.58 at the time of the writing. The decline is attributable to the profit-taking factor after METX soared 44.34% on Thursday and closed regular trading hours at $0.60. The surge came after the company’s announcement to enter into a strategic partnership with AGM Group Holdings.
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Reason for the surge in METX
METX announced on Thursday that it entered into a strategic cooperation agreement with AGM Group Holdings Inc. AGM is an integrated tech company having a focus on fintech software services and high-performance hardware manufacturing. According to the agreement, the parties agreed to cooperate on the R&D of blockchain applications as well as the establishment of the supply chain for the crypto mining business. The agreement has an initial order of AGMH’s cryptocurrency mining machines from Meten. Also, there’s an option for Meten to purchase additional machines in future.
Closure of public offering
On 7th September, METX announced to close an underwriting public offering. The company intended to generate gross proceeds of $60 million from the offering. The offering included 22,500,000 of the Company’s ordinary shares having a public offering price of $0.30 per share and 177,500,000 pre-funded warrants. The warrants were offered at a public offering price of $0.2999 per share, with a $0.0001 per share exercise price for each pre-funded warrant. The company said that it intended to use the net proceeds for capital expenditure and general working purposes.
Q2 2021 financial highlights
On 18th August, METX reported the financial results for the second quarter of the fiscal year 2021. The quarter ended on 30th June. The company’s revenue increased 8.2% year-on-year to $63.7 million during the quarter. The gross profit for the quarter was $10.2 million, an increase of 23.4% when compared with the same period of 2020. The net loss bore by the company during the quarter was $11.7 million, a decrease of 16.2% when compared with the same period of 2020.
Commenting on the results, Alan Peng, Chief Executive Officer of METX said that strong quarterly performance indicates the confidence in company’s ability to execute its strategies. Further, he said that the company is focused on meeting the needs of the market and navigating the impact of the pandemic on its business, which, the company expects would pay dividends in near future.
What’s ahead for METX?
During the last one month, METX has surged more than 80% based on business expansion strategies by the company. Analysts believe that the company is in a strong position financially to reap the benefits in quarters to come.