SHANGHAI – MultiMetaVerse Holdings Limited (NASDAQ: MMV), a China-based animation and entertainment company, has announced its intention to acquire Bowong Technology (Shenzhen) Co., Ltd., an AI company specializing in e-commerce solutions.
This potential acquisition, which is currently in the non-binding term sheet stage, would involve the issuance of MMV's Class A ordinary shares to Bowong AI shareholders.
Bowong AI, established in 2022, has developed proprietary AI models designed to enhance content creation for e-commerce platforms, aiming to address the challenges of time and budget constraints.
The company's AI-powered content distribution algorithm is said to enable rapid production and targeted dissemination of personalized marketing content, which could help vendors expand their market reach.
The terms of the deal include a 90-day exclusive negotiation period for MMV to finalize a definitive agreement and a one-year lock-up period for the consideration shares. The eventual number of shares to be issued will be determined following due diligence and negotiation.
Yiran Xu, Chairman and CEO of MMV, expressed admiration for Bowong AI's technical expertise and e-commerce acumen, highlighting potential synergies with MMV's existing animation and gaming businesses. Xu anticipates that AI in e-commerce could be among the early sectors to achieve commercial success in the broader AI revolution.
MMV, known for its Aotu World animation brand and a diverse product portfolio in entertainment, is looking to leverage this acquisition to enhance its merchandise business and reduce content production costs through AI integration.
The information is based on a press release statement and does not reflect any endorsement or speculation about the potential success of the acquisition.
InvestingPro Insights
Amid the news of MultiMetaVerse Holdings Limited's (NASDAQ: MMV) potential acquisition of Bowong AI, a closer look at the company's financial health through InvestingPro data reveals a challenging landscape. With a market capitalization of $19.53 million, MMV's valuation reflects investor sentiment and the size of the company in the competitive tech industry. The adjusted P/E ratio for the last twelve months as of Q4 2023 stands at -0.74, indicating that the company is not currently generating profits relative to its share price, which is common in growth-focused tech firms investing heavily in new technologies like AI.
The company's revenue for the last twelve months as of Q4 2023 was reported at $9.01 million, with a notable decline in revenue growth of -26.31% during the same period. This suggests that MMV is experiencing a contraction in its sales, which is an important factor for investors to consider when assessing the company's future revenue potential post-acquisition. Despite this, MMV's gross profit margin remains substantial at 45.58%, showing that it retains nearly half of its revenue as gross profit, which could provide some cushion to absorb the costs of integrating Bowong AI's technology.
InvestingPro Tips highlight the importance of examining a company's revenue growth and profit margins when considering an acquisition's potential impact. MMV's recent price performance has been volatile, with a 7.81% increase over the past week but a significant drop of -53.84% over the past year, reflecting the high-risk nature of investing in small-cap tech stocks. Investors looking to dive deeper into MMV's financials and future prospects can find additional insights with an InvestingPro subscription. Use the coupon code PRONEWS24 for an extra 10% off a yearly or biyearly Pro and Pro+ subscription, which includes numerous additional InvestingPro Tips to guide investment decisions.
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