Hudson Capital (HUSN) Stock Rallied 32.6% After Selling Its Chinese Unit

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Simon Mugo
Updated: 1 Apr 2022

Key points:

  • Hudson Capital (HUSN) stock rallied 32.6% after selling its Chinese subsidiary.
  • The company has now transitioned to the North American logistics industry.
  • However, the firm did not generate a profit from the sale of HKIFS.

The Hudson Capital Inc. (NASDAQ: HUSN) stock price rallied 32.6% after revealing that it had sold its wholly-owned subsidiary Hong Kong Internet Financial Services (HKIFS) to private investors.

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The sale was completed on March 30, 2022, and included all of the previous operations, commitments, and obligations related to its Chinese operations. The divestiture also marks the end of Hudson’s legacy PRC financial advisory business, which it now regards as a non-core business.

While investors cheered the sale, which frees up Hudson Capital to focus on its transportation logistics technology platform, the company gained little from the transaction after clarifying that it incurred some minor legal fees for the structuring and formalization of the deal.

Investors wondering why Hudson Capital did not net a profit from the recent sale should know that the company did not provide a detailed explanation of the same. However, Hong Kong Internet Financial Services (HKIFS) might have had significant debt, and other encumbrances passed on to the news owners.

Javier Selgas, Hudson Capital and Freight App Inc’s CEO, said: “As we focus more on our core business as a transportation logistics technology platform company and on improving operations, we decided it would be prudent to divest from any non-core, non-performing businesses. With the sale of HJIFS, our operations are 100% based in North America, creating room for long-term growth in our target markets.”

Despite the sale transaction not yielding any profit for Hudson Capital, it generated significant interest among investors since over 4.34 million HUSN shares had changed hands at writing.

As an investor, I am looking forward to seeing how Hudson Capital performs in the future now that all its operations are based in North America, as it serves the rapidly expanding transportation and logistics industry.

Hudson Capital shares have fallen 85.6% in 2022 after implementing a 5 for 11 stock split, causing its share price to fall on February 15, 2022. Can the shares rally higher going forward?

*This is not investment advice. Always do your due diligence before making investment decisions.

Hudson Capital share price.

Hudson Capital stock price 01-04-2022
Source: Tradingview

The Hudson Capital stock price rallied 32.64% to trade at $2.56, rising from Thursday’s closing price of $1.93.

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