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Investing.com -- Taoping Inc. (NASDAQ:TAOP) stock fell 8.4% in premarket trading Friday after the smart cloud platform provider announced it had entered into a non-binding Letter of Intent to acquire Alphalion Holding Limited.
The proposed acquisition, which would give Taoping 100% equity interest in Alphalion, remains subject to due diligence, negotiation of a definitive agreement, and customary closing conditions. The companies have not yet determined the purchase price or payment method, which will be established in the definitive agreement following due diligence completion.
According to the announcement, the LOI will automatically terminate if the transaction is not completed by October 31, 2026. Taoping described the potential acquisition as "another significant milestone" in its strategic expansion of its AI-driven digital ecosystem.
Alphalion Holding is a technology enterprise group with over 60 core patents, operating across three key domains: embodied robotics, AI servers, and composite new materials. The Hong Kong-based company controls several subsidiaries in mainland China and Singapore.
"As use cases around AI continue to rapidly expand, our proposed acquisition of Alphalion Holding marks another important strategic step in expanding Taoping’s addressable market, strengthening our solutions portfolio and accelerating growth," said Jianghuai Lin, Chairman and CEO of Taoping.
The negative market reaction suggests investors may be cautious about the acquisition plans, which currently lack specific financial terms and have a lengthy completion timeline of potentially more than two years.
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