Observation Holdings Inc SIGN Shares surged more than 250% Tuesday as traders circled a company social media post about a partnership with Microsoft Corp MSFT. After the market closed, the company provided an update that sent the stock tumbling.
What happened: AI solutions company Remark Holdings announced Tuesday that it has entered into an “initial $80 million partnership” with Microsoft.
“It’s official!!! @Microsoft makes #RemarkAI global together,” the company said in a message send on X.
Many X users commented on the post, asking why an official press release hadn’t been issued about the news. Benzinga contacted the company and received confirmation of the deal directly from Remark’s CEO Kai-Shing Tao.
Remark then released an official announcement in a regulatory filing on Tuesday showing that the social media post was somewhat misleading.
Remark confirmed that Microsoft entered into a five-year marketing and cloud services agreement with Remark on January 29, but the details of the “$80 million” deal were different than expected, which triggered a sell-off in the stock.
“During the term of the agreement, our Remark AI business unit and its customers will consume $80 million of Microsoft Azure (“Azure Services”) and Microsoft cloud services, to help Remark AI onboard new customers with Azure and drive use of Azure services, co-market Remark AI solutions on the Microsoft Azure Marketplace, and provide Remark AI with $2 million in Azure cloud services credits and approximately $0.7 million in consulting and migration credits,” yes reads in the declaration.
Remark noted that the partnership is focused on its computer vision models, which it believes are “the most important essential part of the #AI landscape.” Remark uses AI-powered analytics computer vision and intelligent agent solutions to provide an integrated suite of AI tools that help organizations understand customer demographics and behavior.
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MARK Price Action: Shares of Remark Holdings closed 264.4% higher at $1.25 on Tuesday before falling in after-hours trading. According to Benzinga Pro, the stock was down 36.4% at $0.795 at last check.
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