Luokung Jumps 42% on Expected Preliminary Injunction Victory

The mapping technologies provider said it's "likely to succeed" in the court ruling.
Anthony RussoMay 03,2021,18:13

Shares in Luokung Technology (Nasdaq: LKCO) skyrocketed as much as 42% on expectation of a favorable court ruling on a preliminary injunction.

The mapping technologies provider was one of the last Chinese companies to be blacklisted by the Trump administration for alleged ties to the nation’s military. Luokung denied any affiliation to the Chinese military and filed a complaint with the U.S. District Court for the District of Columbia arguing the designation was “unlawful.”

If Luokung does not get a win in the courts, May 7 would likely be the company’s last day of trading on Nasdaq. But in a statement on Friday night, the Beijing-based company had investors upbeat on the outcome.

“In connection with its lawsuit, the Company has filed a motion for a preliminary injunction asking the Court to prevent the enforcement of the CCMC designation and the associated restrictions while the lawsuit is pending,” Luokung said.

But most importantly Luokung “argues that it is likely to succeed on the merits of its claims.”

In March, Chinese smartphone giant Xiaomi (OTC: XIACY; HKEX: 01810) won its preliminary injunction in a similar case against the Trump administration, creating precedence for other Chinese companies hurt by the blacklist.

Adam Prior, senior vice president of The Equity Group, told CapitalWatch in an email today that the firm has no "comment on [the] case outside of what we state publicly.”

Separately, Luokung announced last month that it regained compliance with Nasdaq’s minimum required bid price of $1.00 per share. While it's unclear when a decision will be reached, the news today has helped lift its stock price further.

Shares in Luokung have more than doubled year-to-date.

Topics:Luokung Technology, Xiaomi.