Kustom Entertainment Inc. (NASDAQ:KUST) shares jumped 40.28% in after-hours trading on Tuesday to $2.96 after announcing a non-binding agreement to divest its video solutions division.
The stock closed at $2.11 in regular trading, down 2.76%, according to Benzinga Pro data.
$6-8.5 Million Video Division Sale
Kustom announced on Jan. 22 that it entered a Memorandum of Understanding with Virginia-based technology-enabled firm Cycurion Inc. (NASDAQ:CYCU) to sell its video solutions business for a transaction value of $6.0 million to $8.5 million, based on pro forma financials.
The company stated that the deal structure includes $1.0 million to $1.4 million in cash consideration, with the remainder to be paid in Cycurion preferred stock.
Strategic Shift to Live Events
According to Kustom Entertainment, a live event production and ticketing company, the divestiture supports the company’s focus on live event production and proprietary online ticketing operations, aligning with its Nasdaq rebranding initiative.
Stanton E. Ross, CEO of the company, said the divestiture “allows us to sharpen our focus and allocate resources to the massive opportunity we see in the entertainment sector.”
The company noted that the transaction remains subject to customary closing conditions and final negotiations.
Trading Metrics, Technical Analysis
The Relative Strength Index (RSI) of Kustom Entertainment stands at 43.19.
With a market capitalization of $1.69 million, the stock of the Kansas-based company has a 52-week high of $4.48 and a 52-week low of $1.80.
Kustom Entertainment, formerly Digital Ally, Inc., which rebranded in early January, has had a challenging 12 months, with its stock falling 99.88%.
It is currently near the lower end of its 52-week range, just 11.57% above the low, indicating it is much closer to its 52-week low than its high.
Given the stock’s ongoing decline, any signs of a recovery would need to be clearly confirmed before investors consider making substantial moves.
Photo: mukul126 / Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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