Global Mofy AI Shares Sink 14% After Hours: Here's Why

Global Mofy AI Ltd. (NASDAQ:GMM) shares fell 14.32% to $0.95 in after-hours trading Tuesday after the company disclosed a share-exchange agreement to acquire an additional stake in Qifei (Shanghai) Technology Co. Ltd. Global Mofy AI provides artificial intelligence and digital-content technology services. Qifei Stake Deal Under the agreement, Global Mofy AI issued 3 million Class B ordinary shares at $1.30 per share, valued at $3.9 million, in exchange for an additional 4.875% equity interest in Qifei through its subsidiary. The company previously agreed to acquire a 5.06% stake in Qifei. Upon closing the latest transaction, its subsidiary is expected to hold a combined 9.935% equity interest in the company. Related-Party Transaction Global Mofy AI Chairman and CEO Haogang Yang is the beneficial owner of both the seller and the share recipient, and he is also the sole director and legal representative of Qifei. The company disclosed that Yang has a material interest on both sides of the transaction, making it a related-party transaction. The company said its board determined that the transaction terms were no less favorable than those available in an arm’s-length deal with an unaffiliated third party. Each Class B share carries 20 votes and does not confer dividend rights or convert into Class A shares. Following the issuance, Yang will beneficially own approximately 87.9% of the voting power of the company’s outstanding ordinary shares. Read Also: Elon Musk Most Republican, Mark Zuckerberg Comes Second: Poll Shows Americans Now Associate Tech CEOs With GOP Trading Metrics, Technical Analysis Global Mofy AI has a market capitalization of approximately $10.64 million. Over the past year, Global Mofy AI shares have fallen 98.85%. The stock has traded between a 52-week high of $100 and a low of $1.07. Benzinga’s Edge Stock Rankings show a negative price trend across short-, medium- and long-term time frames. Price Action: Global Mofy AI shares closed regular trading at $1.11 on Tuesday, down 5.13% See More: Top Momentum Stocks Photo: Sudarsan Thobias / Shutterstock