Generating bullish waves amid a dour Friday session for the major equity indices, shares of Guardforce AI (NASDAQ:GFAI) soared around 25% in the morning session before settling back down to about 17% in the early afternoon hours. Earlier today, Guardforce AI presented at a Benzinga event. It’s possible that anticipation of a big announcement spiked GFAI stock, as it otherwise swung higher on no news items.
Interestingly, the news arm of Benzinga mentioned that “Guardforce AI recently established a collaboration agreement with Hong Kong Industrial Artificial Intelligence and Robotics Centre Limited (FLAIR) to work together on developing Robotics-as-a-Service (RaaS) solutions and artificial intelligence (AI) cloud platforms worldwide.” While significant, Guardforce announced this partnership back on June 30, almost a month ago.
Given that GFAI stock trades well below the dollar threshold, it’s vulnerable (all other things being equal) to meme-trade dynamics such as a short squeeze. However, a look into GFAI’s statistics reveal a short percentage of float of only 3.3% and a short ratio of less than one day.
Likely, speculators anticipated that Guardforce would reveal a groundbreaking development at the Benzinga event. Chatter on social media platforms suggests such a sentiment. Further, GFAI stock gapped up nearly 29% to start the Friday session, only to progressively decline from there.
Keep in mind that the market opens at 9:30 a.m. Eastern, whereas Benzinga scheduled Terence Yap, chairman of Guardforce AI, to present at 10:00 a.m. Eastern.
GFAI Stock Is an Intriguing but Speculative Trade
Fundamentally, GFAI stock presents an intriguing underlying business. According to its corporate presentation, Guardforce AI bills itself as a “globally integrated security solutions provider that is focused on developing robotic solutions and information security services” that complement its logistics business. Currently, the company has a strong presence in Asia. However, it seeks continued expansion in the region along with the U.S. market.
Arguably, its most enticing division is the RaaS arm, which enables smart automation and conveniences. For instance, Guardforce’s concierge robot technology enables contactless temperature screening and attendance management. Such innovations are applicable toward academic and professional infrastructures, retail establishments and healthcare facilities.
Further, Guardforce’s end-to-end cash management solutions platform has generated significant traction. Currently, the company’s secured logistics arm features 21 branches in Thailand and more than 250 secured (or armored) transportation vehicles.
Despite these catalysts, GFAI is a literal penny stock, trading hands at around 31 cents at the time of writing. Moreover, shares have plummeted 73% on a year-to-date basis, even considering today’s big bump higher. Therefore, the investment is speculative and prospective buyers should only approach with extreme cautiousness.
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On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.