Shares of Luokung Technology (>NASDAQ:LKCO) were gaining today after the Chinese mapping technology company said it closed on its previously announced acquisition of eMapgo Technologies, a provider of navigation and electronic mapping services.
The stock closed up 20.1% on the news.
Luokung's acquisition had attracted attention because it increased the company's exposure to electric vehicles, a sector that has seen surging growth as investors bet on a future where EVs are mainstream.
In a statement, CEO Xuesong Song said:
This is a significant milestone in the Company's history as we have created one company with technologies and a product portfolio that will provide us with a clear competitive advantage in the fields of autonomous driving, smart electric vehicles, intelligent transportation, and smart cities, enabling us to accelerate our development in this industry while being accretive to Luokung's financials.
eMapgo holds approximately 24% of the Chinese auto market's share of in-dash navigation, giving the company a strong position in the sector. It said the combination of Luokung's spatial-temporal capabilities with eMapgo's data gives the company a core competitive advantage in autonomous driving.
Luokung shares have been highly volatile in recent weeks as the stock soared after it announced the acquisition in February but then faded in the subsequent weeks. The company has also been placed on a Department of Defense blacklist that would prevent Americans from investing in the company, though a final decision on that has been delayed until May.
Considering the threats and opportunities facing the company in the form of the Pentagon ban and its increasing exposure to the autonomous vehicle market, investors should expect Luokung's volatility to continue.