Here’s Why Powerbridge Penny Stock Fell Sharply

Shares of Powerbridge Technologies Co. (NASDAQ: PBTS) have continued to move sharply lower after the company announced a strategic partnership with Huawei Technologies to promote and offer its services to local ports and customs in China.

Huawei partnership: A double-edged sword?

Under the terms of the agreement, the two companies will together use modern technologies including blockchain, cloud computing, artificial intelligence (AI), and the internet of things (IoT), as well as offer their product and services to local ports and customs in the country.

Powerbridge, which provides a software application, technology solutions, and services to corporate and government customers, and Huawei will also attempt to achieve a deeper collaboration to develop new digital transformation solutions in the global trade industry and leverage joint marketing influence in both local and international markets.

"The collaboration between Powerbridge and Huawei will be a great opportunity to accelerate the digital transformation in the industry. We are looking forward to this strategic cooperation which will be mutually beneficial and complementary for both parties, allowing us to create a synergy effect in the market,” said Stewart Lor, President, and CEO of Powerbridge.

The agreement outlines that the collaboration will primarily focus on promoting the construction of Smart Ports; improving and speeding up the construction of Smart Customs, and working together to come up with innovative solutions for Smart Bonded Zone. Along with the announcement, Powerbridge has also rolled out its two new products in Smart Port and Smart Customs.

The two companies will leverage Huawei’s broad market resources and Powerbridge’s global trade digital solutions to create a modern global trade ecosystem in China. The cooperation is set to bring a number of digital upgrades and innovations for the custom, ports, and special bonded zone in the country.

“We are also looking forward to seeking deeper collaboration in providing blockchain solutions in global trade industry together with Huawei," Lor adds.

Higher volatility and trading activity

Shares of the company are under pressure as Huawei has faced criminal charges from the US regulators for allegedly having very close ties to the Chinese military. In June last year, the Defense Department said that 20 top Chinese firms, including Huawei, are either owned by or backed by the Chinese military.

As a result, Powerbridge is one of the more volatile penny stocks in the markets recently. This market segment has grown immensely in popularity in recent years as easy-to-use online trading platforms, such as Robinhood, attracted millions of retail investors to financial markets.

Robinhood, which is preparing to go public after it had filed confidentially for an initial public offering (IPO) last month, is reportedly looking to raise more cash through bank credits to further solidify its balance sheet ahead of the IPO.

The online trading business is reportedly seeking a valuation of $30 billion after it witnessed a rapid rise in revenues, which soared from about $90 million in Q1 2020 to around $220 million in Q4. According to its CEO Vlad Tenev, Robinhood has more than 13 million customers with many of them attracted to trading penny stocks as they trade for a relatively low share price.

Going forward, traders can expect further volatility in Powerbridge price action as shares soared to record highs near the $10.00 mark in February, before plunging nearly 80% in the coming weeks.

This article does not necessarily reflect the opinions of the editors or the management of EconoTimes