China-based spatial-temporal data services provider Luokung Technology (NASDAQ:LKCO) is definitely not on everybody’s radar. However, that could change soon as LKCO stock might be headed for a fast breakout.
This is a highly affordable stock that’s been known to make swift moves in both directions. I’ll be the first to admit that it’s a speculative investment that’s not ideal for large position sizes.
What we’ll do today is learn about the company’s business model and its role in the smart transportation/autonomous driving market.
Plus, prospective investors should be aware of a recent situation involving Luokung Technology and the Nasdaq Exchange. With all of that in mind, let’s dive right into the technical aspects of the stock.
A Closer Look at LKCO Stock
For much of the past 12 months, LKCO stock remained under the $1 level. It was trading at 68 cents at the end of 2020.
However, the stock broke through the $1 barrier in 2021. Starting in early February, the shares went on a rocket ride that culminated in a 52-week high of $3.86 on Feb. 16.
That rocket ride turned into a roller-coaster ride, though, with LKCO stock declining to 72 cents in early March.
Then, the bulls regained control of the price action, pushing the stock back up to $1.89 on Mar. 19.
If you’re not feeling seasick from the price trajectory, then you might want to hold on to LKCO stock as the bulls seem to be in the driver’s seat once again.
Mapping Out a Smart Business
Luokung Technology, as the company explains, “mainly provides spatial temporal big data PaaS, SaaS and DaaS intelligent services based on its self-developed patented technology.”
Moreover, these services potentially have a variety of applications, from intelligent transportation and automatic driving to IoT (the Internet of things) and even smart cities.
Probably the most interesting application of spatial-temporal/location-based services technology, at least for Luokung Technology’s investors, would be its use in autonomous driving.
The company elaborates on this in its investor presentation. Luokung explains that its technology’s “High-precision positioning” and “high-precision maps [make] map positioning more accurate.”
Furthermore, this technology provides “lane-level positioning, navigation, display, and accident alert, and more detailed highway asset management.”
The company also provides a real-time, high-definition map updating service. Again, there are potential applications to the autonomous driving market here, and even to automatic valet parking.
All in all, Luokung is a small company but one that provides tech-focused services that could be very important to the future of self-driving technology.
That’s all fine and good, so how could anyone – or any government – possibly have a problem with Luokung Technology?
International Issues, and a Lifeline
Let’s rewind the clock a little bit. On Nov. 12, 2020, former President Trump issued Executive Order 13959, under which the U.S. Department of Defense (DoD) would have prohibited U.S.-based investors from trading LKCO stock as early as Mar. 15, 2021.
In compliance with this, the Nasdaq Exchange notified Luokung that trading of the company’s ordinary stock shares would be suspended at the open of business on that same day, Mar. 15.
Reportedly, it has been confirmed that the DoD has listed Luokung as a “Communist Chinese military company.”
On the other hand, the U.S. has a new presidential administration which might not necessarily want to classify Luokung and other similar Chinese businesses in this way.
And, there’s actually some good news on this topic. According to Luokung, a letter from the Department of the Treasury Office of Foreign Assets Control has confirmed that “any restrictions on U.S. persons to trade Luokung’s securities or derivatives will not take effect until May 8, 2021.”
So, it appears that Luokung has been given a lifeline, at least for the time being. Current and prospective investors will definitely want to watch for future developments as they unfold.
The Bottom Line
There’s no way to know exactly how the situation with Luokung, the DoD and the Nasdaq Exchange will turn out. With a change in the U.S. government, there’s hope that any current restrictions and/or tensions will be resolved.
Yet, there’s no need to focus exclusively on that. Instead, prospective LKCO stockholders should consider the company’s leading-edge technology.
And if you believe in the future of autonomous driving tech, then perhaps this stock deserves a small place in your portfolio.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.
