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Datasea Inc. Shows Remarkable Growth in Q2 Fiscal Year 2024 Datasea Inc., ( NASDAQ:DTSS ) a leading global technology company specializing in intelligent acoustics and 5G multimodal communication, has reported stellar financial results for the second quarter ended December 31, 2023. The company's impressive performance underscores its strategic focus on innovation, market expansion, and customer-centric approach. In the second quarter of fiscal year 2024, Datasea ( NASDAQ:DTSS ) recorded a substantial revenue of approximately $11.3 million, marking a remarkable surge compared to $0.1 million in the corresponding period last year. This phenomenal growth can be attributed to the robust expansion of its 5G multimodal communication business in China, where the company secured significant service agreements. Datasea's CEO, Zhixin Liu, emphasized the pivotal role played by the sales team in promoting products tailored to meet customer needs while continuously enhancing product quality and services. The company's revenue for the first half of fiscal year 2024 soared to $18.2 million, compared to a mere $131,459 in the same period of the previous year, reflecting a staggering increase of 13,766.8%. This exponential growth underscores Datasea's leadership in the research and development of 5G multimodal communication technology. The sustained expansion of its customer base, coupled with proactive market promotion and exceptional customer support, has solidified its market positioning. Datasea's ( NASDAQ:DTSS ) proactive measures to streamline administrative expenses have yielded positive results, with a 24.8% reduction in administrative costs compared to the same period last year. The company's prudent approach to managing accounts receivable, including strengthening credit evaluation processes and optimizing collection procedures, has led to a significant decrease in outstanding balances. The company's operations update highlights its strategic initiatives aimed at leveraging acoustic intelligence and expanding its international footprint. Datasea's ( NASDAQ:DTSS ) intelligent acoustics products segment, driven by cutting-edge technology, addresses real-world challenges across various industries. The successful launch of air sterilization products in China and the ongoing development of new offerings underscore the company's commitment to providing innovative solutions for healthy living environments globally. Datasea's ( NASDAQ:DTSS ) foray into the US market through its subsidiary, Datasea ( NASDAQ:DTSS ) Acoustics LLC, signifies a significant milestone in its expansion strategy. Collaborations with renowned research institutions and the pursuit of US patents underscore the company's commitment to technological innovation and intellectual property protection. In the realm of 5G multimodal communication, Datasea ( NASDAQ:DTSS ) continues to pioneer advancements, offering a comprehensive product portfolio with high brand recognition. Strategic partnerships and agreements with key clients further reinforce the company's position as a market leader in this domain. Looking ahead, Datasea ( NASDAQ:DTSS ) remains poised for sustained growth, driven by its relentless pursuit of technological excellence, market expansion initiatives, and strategic collaborations. With a solid foundation and a clear vision for the future, Datasea ( NASDAQ:DTSS ) is well-positioned to capitalize on emerging opportunities and deliver long-term value to its stakeholders. In conclusion, Datasea's ( NASDAQ:DTSS ) remarkable financial performance and strategic initiatives underscore its position as a trailblazer in the technology landscape, poised for continued success in the dynamic global market.
NASDAQ:DTSSLong
by DEXWireNews
Mysterious Price Action in Shares of Datasea, Inc. Last Closing Price: $2.63 50-Day Simple Moving Average: $1.60 Volume Weighted Average Price: $2.66 Relative Strength Index: 72.09 20-Day Average Daily Volume: 572,924 Shares Outstanding: 24,244,130 Available Borrow: 100,000 Borrow Fee Rate: 3.80% Last month around Valentine’s Day, someone fell in love with Datasea, Inc. NASDAQ:DTSS . The company’s stock price, which had been declining since Jul. 2021, suddenly sprang to life on Feb. 10, 2022. Over the following 12 days, the price rose 81% to $2.64 per share. It wasn’t the first time Datasea’s stock price had spiked inexplicably. In Jul. 2021, when Datasea was down to its last $50,000 in cash, the company tapped its 2020 shelf registration to sell 2,436,904 shares at $3.48 per share in a registered direct offering . For each share purchased, an investor in the offering also received an unregistered warrant to buy 0.45 of a share at an exercise price of $4.48 per share. Issuers aren’t required to publicly disclose private offerings before they occur. Therefore, Datasea didn’t announce its offering in advance. However, during the five business days before the sale, the company’s stock price levitated as if by magic from $2.93 to $4.41 per share on unusually heavy volume. Moreover, short interest in Datasea’s stock reached 945,341 shares, which was 38 times the short interest two weeks earlier. When Datasea issued a press release announcing that the offering had closed, its stock price slumped to $2.68 per share, preventing the investors who had just bought at $3.48 from selling at a profit. Nevertheless, someone profited. By Jul. 30, short interest in Datasea’s stock had fallen to 41,637 shares, indicating that traders had covered 96% of the short interest that had been open before Datasea disclosed the offering. Wall Crossing When an issuer like Datasea is planning a private offering, its selling agents gauge the interest of potential investors in confidential discussions before the offering is announced publicly. The process is commonly called “wall crossing” since the potential investors cross over to become temporary insiders pursuant to Regulation FD . As such, they are prohibited from trading on information they learn during the discussions. A study published in the May 2017 issue of the Review of Finance found evidence of widespread short-selling before private placements were publicly announced. The researchers showed that pre-announcement short sellers are able to predict announcement day returns. The effects are especially strong when a high number of hedge funds are buyers in an offering. The investors in Datasea’s Jul. 2021 offering were hedge funds that routinely participate in such deals: Intracoastal Capital, LLC; 3i, LP; L1 Capital Global Opportunities Master Fund; and Hudson Bay Master Fund Ltd. As of Nov. 16, 2021, they still appeared to own all the shares and warrants they acquired in the offering, according to a registration statement . The securities purchase agreement they signed prohibited them from shorting Datasea’s stock once they received a term sheet containing the offering price. But the agreement acknowledged that the investors may have already shorted the stock before receiving a term sheet and that they were free to short the stock after the offering closed. Hudson Bay Rules Regulation M, Rule 105 of the Securities Exchange Act prohibits investors from buying stock in an underwritten public offering if they have shorted the same stock within five days before the pricing of the offering. In fact, one of the investors in Datasea’s offering, Hudson Bay Capital Management LP, consented to a cease-and-desist order from the SEC in 2013 after allegedly engaging in such activity. But the rule does not apply to private offerings. To be clear, we are not suggesting that Hudson Bay Capital or any other participants in Datasea’s offering violated any securities laws, breached any contracts, or manipulated Datasea’s stock price. Rather, we are using Datasea’s offering to demonstrate how an investor who was privy to such a sale could, in theory, benefit from the type of price action Datasea’s stock exhibited before and after the transaction. The jump in Datasea’s stock price last month wasn’t tied to an imminent sale of shares. A charitable interpretation is that heavy buying ensued after the company released its 10-Q report for the quarter ended Dec. 31. Indeed, Datasea reported revenue of $8,979,479 for the quarter, which was a 70-fold increase from last year. The growth came mostly from 5G messaging services, which the company recently began selling to Chinese telecom carriers. However, Datasea sold the services barely above cost. The company earned gross margin of only 3.07% on 5G messaging because it undercut competitors on price to gain market share. Accounts receivable grew faster than revenue and contributed to -$2,424,653 of negative cash flow from operations during the quarter. Net loss increased 73% to -$1,677,293. Datasea ended the quarter with $2,240,708 of cash, which will last less than six months at its current burn rate. That means the company will likely sell more shares in another dilutive offering this year. Given the market’s reaction to the last offering, we believe the recent rally in the stock will be short lived.
NASDAQ:DTSSShort
by shortfinder