Remark Holdings Inc (NASDAQ: MARK) experienced a surge in its share price of over 250% on Tuesday, following a social media post about a partnership with Microsoft Corp (NASDAQ: MSFT). However, after the market closed, the company provided an update that caused the shares to tumble.
The AI solutions company, Remark Holdings, announced on Tuesday that it had entered into an “$80 million dollar initial partnership” with Microsoft. The company shared the news on social media, stating, “It’s official!!! @Microsoft making #RemarkAI global together.”
The post garnered a lot of attention from users, who questioned why an official press release was not issued to announce the partnership. Benzinga reached out to Remark Holdings for confirmation, and CEO Kai-Shing Tao confirmed the deal.
However, Remark Holdings later released an official announcement in a regulatory filing, revealing that the social media post was somewhat misleading. The filing clarified that Microsoft had indeed entered into a five-year cloud services and marketing agreement with Remark on January 29th. However, the details of the “$80 million” deal were different than anticipated, leading to a sell-off in shares.
The filing stated, “During the agreement period, our Remark AI business unit and its customers will consume $80 million of Microsoft Azure cloud services (‘Azure Services’) and Microsoft, to aid Remark AI in integrating new customers with Azure and driving the use of Azure Services, will co-market Remark AI’s solutions on the Microsoft Azure Marketplace and provide Remark AI with $2 million of Azure cloud services credits and approximately $0.7 million of consulting and migration credits.”
The partnership between Remark Holdings and Microsoft is centered around Remark’s computer vision models, which the company believes are crucial in the AI landscape. Remark utilizes AI-powered analytics, computer vision, and smart agent solutions to provide organizations with an integrated suite of AI tools that help understand customer demographics and behavior.
Remark Holdings’ stock price experienced a significant surge, closing Tuesday up 264.4% at $1.25. However, in after-hours trading, the stock fell by 36.4% to $0.795.
It is important for investors and traders to carefully analyze announcements and confirm details before making investment decisions. In this case, the initial excitement surrounding the partnership announcement was dampened by the clarification provided by Remark Holdings in the regulatory filing.
