- GSTechnologies shares fell 2.1% after disposing of its EMS Wiring unit.
- Investors reacted appropriately by selling some of their GST shares.
- So what comes next for GSTechnologies? Read on to find out.
The GSTechnologies Ltd (LON: GST) share price fell 2.13% after disposing its EMS Wiring Systems Pte. Ltd (EMS) subsidiary. The company was sold to its Chairman, Teo Chiah Chiu Raphael (Raphael Teo).
The divestiture was expected as GSTechnologies repositions itself as a fintech and blockchain company, a structure that EMS Wiring did not fit into. In addition, GST noted that the EMS sale was funded via a share buyback program.
Also read: The Best UK Tech Stocks To Buy Right Now.
Raphael Teo surrendered the 60 million ordinary shares he held in GST as payment for taking complete control of EMS Wiring. The company has the potential to grow but does not fit into the current strategy being pursued by GSTechnologies.
Investors reacted appropriately to the news by selling some of their GST shares, given that the demerger of EMS Wiring represents a loss of value for GST shareholders since the company will no longer have access to the assets owned and revenues generated by EMS.
GSTechnologies has to prove to investors that it can operate profitably despite the sale of EMS Wiring. GST shares are down 50% this year as investor appetite for unprofitable tech startups dwindled in the current high-interest rate environment.
The company is making progress towards the launch of its stablecoin in the UK, having appointed Pinsent Masons LLP as its legal advisor to assist with the stablecoin application for admission to the UK Financial Conduct Authority (FCA’s) Regulatory Sandbox.
GSTechnologies is yet to make the formal application but is optimistic that the UK’s openness to the stablecoin and crypto industry and the regulator’s willingness to work with the industry on appropriate rules and regulations will help it get the approval it needs.
The company also announced that its Annual General Meeting (AGM) would be held at 11 a.m. (SGT) on 31 October 2022 at 240 Macpherson Road, #02-04 Pines Industrial Building, Singapore, 348574.
*This is not investment advice.
GSTechnologies share price.
The GSTechnologies share price fell 2.13% to trade at 1.150p, from Tuesday’s closing price of 1.176p.