After spiking up from the level of $0.75 to the $2.25 mark, the share price of Kid Castle Educational Corp. (KDCE) closed near $1.25. Besides, in less than two days, the company moved more than 1 million shares. These are quite impressive figures, so we decided to investigate Kid Castle’s business model. We actually liked what we discovered.
See the most recent share price dynamics before we provide more information:
WHAT’S GOING ON ? – CHANGE OF CONTROL
On October 25, 2019, the market learnt that a new shareholder acquired a 70% stake in the company. The announcement of the acquisition of shares contributed to the increase in the demand for the stock. With that, what seemed to be appreciated by the market is the new business model. The acquirer of the shares is Cannabinoid Biosciences, Inc. (“CBDZ”), a biopharmaceutical company. The fact that CBDZ operates in the cannabis industry was a catalyst for the stock price. The market is expecting Kid Castle to move into a growing market:
“Cannabinoid Biosciences, Inc. (“CBDZ”) is a biopharmaceutical company, which intends to engage in the discovery, development and commercialization of cures and novel therapeutics from proprietary cannabinoid, cannabidiol, endocannabinoids, phytocannabinoids, and synthetic cannabinoids product platform suitable for specific treatments in a broad range of disease areas.” Source: Crowdfunder
CBDZ does not only research and sell new products. According to our research, the company is also focused on acquiring stakes in other businesses, which distribute substances like Hemp Oil or Crude CBD Oil. Besides, the company appears to be signing partnerships with extract facilities across the United States and local farmers. Finally, it also offers financial reporting, Business Valuation, and M&A among other services. The management seems to have accumulated a lot of know-how. With this in mind, the company appears to be well prepared to grow in the following years. We need to stay tuned.
THE REACTION OF THE MARKET – WHAT DID THE COMPANY SAY?
The market got very excited about the change of control. Not many companies see their share price multiplied by 10 in less than two trading sessions. As a result, Cannabinoid Biosciences, Inc. released a public statement about the recent unusual activities in the shares of KDCE. The lines below show what the market needs to know:
“This morning after the filings were released to the public via the Edgar systems, we noticed unusual activities in the shares of KDCE. We’re hereby informing our existing shareholders to remain calm and wait for us to finish the process and complete all the necessary filings with the regulators.” Source: Linkedin Post
What do we expect from now on? KDCE announced in a recent filing that new directors and a new CEO were elected. On the same lines, in the coming weeks, the market may be expecting information from the new management. Their initial words could make the share price move quite a bit because they will most likely determine KDCE’s strategy. Thus, we will most likely study the initial press releases by the company. The more information we have, the more ammunition we have to make the best decisions.
LACK OF SHORT SELLERS – BOTTOM LINE
With a market capitalization of $24.9 million, KDCE appears to have a new business model that the market appreciates. But, that’s not all. Bears don’t seem to believe that the company is an opportunity at the current mark. The table below offers information on the matter:
Source: OTC Markets
After the new acquisition, the new financial statements could change a lot. With this in mind, we will be carefully following the announcements by the company. To sum up, let’s stay tuned. In the coming weeks, we may have to assess a lot of valuable information.
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Previous Financial Analysis:
Disclosure: We hold no position in Kid Castle Educational Corp. either long or short, and we have not been compensated for this article.