Send me real-time posts from this site at my email
Motley Fool

WiMi Hologram Cloud Stock Rallies on News of New Artificial Intelligence Subsidiary

What happened

Shares of WiMi Hologram Cloud (NASDAQ: WIMI) were rallying on Monday after the company announced it has created a new subsidiary to focus on artificial intelligence technology and cloud services. The company's chief operating officer was also promoted to the chief executive officer position, following the previous CEO's resignation last week.

So what

WiMi stock was up as much as 13% early in today's session, but it traded much higher earlier in the year thanks to a lot of hype for the potential of its technology. The company currently only makes money by creating advertising campaigns for its clients and by processing mobile app payments through its middleware software. But investors have pointed to the company's intellectual property as reason to believe it could be something more than what it currently is.

Image source: Getty Images.

Today, investors are celebrating the news that WiMi created a new subsidiary named VIYI Technology. VIYI will function as a stand-alone company to further develop WiMi's intellectual property into something that can actually generate revenue. Earlier this month, WiMi's chief technology officer, Yi Chengwei, resigned for "personal reasons," but now he's back with the company to take the CEO position at VIYI.

This is the second subsidiary WiMi has created recently. In August, the company announced the establishment of Lixin Technology, a company that will focus on "holographic vision intelligent robots" and fabless semiconductor technology.

Now what

It's still too early to know if VIYI Technology will improve WiMi Hologram Cloud's business long term, but I take this news as a positive. If the company truly has game-changing technology, then it needs to be developed as quickly as possible. The creation of VIYI could do that.

It's a positive piece of news for a company still surrounded by many question marks. Included in the uncertainty is the appointment of former COO Shuo Shi as WiMi's new CEO. This follows the surprise resignation of Fanhua Meng on Oct. 16. The company said Meng left for personal reasons, but an unexpected shakeup at the top position should always be viewed with caution.

10 stocks we like better than WiMi Hologram Cloud Inc.
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and WiMi Hologram Cloud Inc. wasn't one of them! That's right -- they think these 10 stocks are even better buys.

See the 10 stocks

*Stock Advisor returns as of September 24, 2020

Jon Quast has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.


Source

Popular posts

Welcome! Is it your First time here?

What are you looking for? Select your points of interest to improve your first-time experience:

Apply & Continue