Remark Holdings Inc MARK experienced a dramatic surge of over 250% in its share price on Tuesday. This enthusiastic response was triggered by a social media post regarding a partnership with Microsoft Corp MSFT. However, the company’s shares faced a swift reversal after providing additional details post-market closure.
What Transpired: Remark Holdings announced an “initial partnership valued at $80 million” with Microsoft on Tuesday. The company’s exuberant tweet, “It’s official!!! @Microsoft making #RemarkAI global together,” stirred considerable interest, prompting queries as to why no official press release had been issued. Subsequently, the company confirmed the deal through its CEO Kai-Shing Tao.
A regulatory filing issued late Tuesday clarified that the social media post had been somewhat misleading, divulging different details than anticipated, thereby triggering a selloff in shares.
The filing confirmed that Microsoft had engaged in a five-year cloud services and marketing agreement with Remark on Jan. 29. However, the actual particulars of the “initial $80 million” deal differed from market expectations, provoking a downturn in the company’s stock value.
According to the disclosure, “During the agreement period, our Remark AI business unit and its customers will consume $80 million of Microsoft Azure cloud services (‘Azure Services’) and Microsoft, to aid Remark AI in integrating new customers with Azure and driving use of Azure Services, will co-market Remark AI’s solutions on the Microsoft Azure Marketplace and provide Remark AI with $2 million of Azure cloud services credits and approximately $0.7 million of consulting and migration credits.”
Remark emphasized that the partnership is focused on its computer vision models, citing them as “the most important essential part of the #AI landscape.” The company utilizes AI-powered analytics computer vision and smart agent solutions to deliver an integrated suite of AI tools aimed at helping organizations understand customer demographics and behavior.
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MARK Price Action: Following the surge, Remark Holdings shares ultimately plunged by 36.4% in after-hours trading, closing at $0.795, in contrast to its earlier 264.4% peak at $1.25. Data retrieved from Benzinga Pro reaffirms this downturn.
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