Why is Creative Realities stock rising? CREX up 87% in pre-market trade

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Why is Creative Realities stock rising? CREX up 87% in pre-market trade

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 Why is Creative Realities stock rising? CREX up 87% in pre-market trade
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Highlights

  • Creative Realities, Inc. (CREX) and Reflect Systems have reached a definitive merger agreement
  • The merger deal is expected to close in the first quarter of 2022
  • CREX will release its third-quarter financial results on Nov 16, before the market open

The stocks of Creative Realities, Inc. (NASDAQ: CREX) continued to attract investors' attention on Monday, evident by their rally in pre-market trading. The CREX stocks were up more than 86% in the pre-market session November 15.

The CREX stock traded at US$2.73 at 7:52 AM ET on November 15, up 86.99% from its closing price of November 12, when it plunged 2.01% to US$1.46.

The pre-market rally of the stocks indicates that investors may have cheered the definitive merger agreement news between Creative Realities and Reflect Systems, that the companies announced Friday. Meanwhile, according to the terms and conditions of the agreement, the combined firm will continue to operate under the name "Creative Realities, Inc." In addition, it would continue to trade on Nasdaq under the ticker "CREX".

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Creative Realities, Inc. is a media and technology firm based in Louisville, Kentucky. It offers digital marketing technology services to a range of clients, including retail firms, retail brands, enterprises, and other entities in the US and Canada. Reflect Systems, on the other hand, is a Dallas, Texas-based company that provides digital signage services, advertising, software, and content-related solutions to its customers.

 

Rick Mills, the company's CEO, who will also continue to hold the same role for the combined firm regarded the merger agreement as an "ideal combination." He added that Creative Realities has a history of wide-ranging and sophisticated digital signage projects.

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Meanwhile, Reflect CEO Lee Summers will lead the combined firm's AdTech facilities, which includes its full integration with supply side platforms and exchanges. In contrast to other digital signage mergers or acquisitions, Creative Realities is planning to fully combine the two companies.

 

The firm will be based out of Louisville, while also operating the Dallas-based office of Reflect.

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Stock performance and financial highlights of Creative Realities, Inc. (NASDAQ: CREX)

The market cap of Creative Realities is US$17.36 million, with a P/E ratio of 13.27. Its EPS is US$0.11. The company's highest and lowest stock prices for the last 52-week were US$3.26 and US$0.86, respectively. Its trading volume on November 12 was 723,412, i.e. over five times the average volume of the last five days.

 

The company will release its third-quarter financial results on November 16, before the opening bell. Meanwhile, in the second quarter of fiscal 2021, the company's revenue tumbled 10% YoY to US$3.3 million, while its net income came in at US$1 million, against a net loss of US$2.5 million in the comparable quarter of the previous year.

 

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Bottom line:

The companies are expecting the merger to be closed in the first quarter of 2022. A technology-focused investment bank, Innovation Advisors, counseled Reflect in the transaction. However, the companies are optimistic that after the merger, the combined company will have a range of offerings in the digital signage sector.

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