One of the more impressive movers in today’s market has to be Genius Group (NYSEMKT:GNS). Shares of GNS stock skyrocketed more than 75% higher at today’s intraday peak following an announcement that the Singapore Court had approved the spinoff of its entertainment business. Since then, shares have settled down, but investors in Genius Group are still up around 10% at the time of writing.
Reportedly, the Singapore Court has officially approved the spinoff of Genius’ Entrepreneur Resorts Limited. This ruling appears to have been communicated just now, though the hearing took place on Tuesday this week.
With this spinoff, investors clearly have plenty to digest. It remains unclear what the timeline, record date and share distribution will be for shareholders in GNS stock. Thus, there’s still a fair amount of uncertainty being priced in by the market, hence today’s volatility.
Let’s dive deeper into what this announcement means for shareholders.
GNS Stock Surges on Key Announcement
Today’s surge represents an impressive move for the education technology company, and one investors aren’t necessarily unused to. This stock has swung wildly this year, surging from around 40 cents per share to start the year to more than $7 apiece before settling down to the 62-cent level (at the time of writing).
Education technology companies, particularly those focused on Asian markets, have been in a period of turmoil in recent years. Various regulatory headwinds (mainly out of China) have cooled investor demand for such stocks. In fact, one might say this sector has been frozen shut, with many foreign investors looking elsewhere to deploy capital.
That said, with the Singapore Court approving this spinoff, perhaps there’s light at the end of the tunnel. If regulators in certain Asian economies are likely to loosen their regulatory stance on this sector, perhaps more institutional and foreign capital can enter the sector. If that’s the case, it should be good news for valuations. We’ll have to wait and see.
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On the date of publication, Chris MacDonald 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.
