Imagination Park Entertainment Inc (CNSX:IP) finds itself trading in a precarious position, investor confidence in the stock having hit all-time lows. The stock has lost more than 80% in market value, since the start of the year, as short sellers threaten to push it to lower lows.
Imagination Park Entertainment Price Analysis
However, recent developments point to a potential bounce back, the company has served a number of catalysts. The company is in the process if raising additional capital that it says will allow it to execute against its healthy pipeline of over 20 products.
The company has also carried out a number of management appointments as it looks to gain access to vital experience needed to uncover new opportunities. In addition, the company has confirmed plans to focus on its new cloud-based enterprise augmented reality platform.
The serving of a string of positive catalysts could help avert a further slide in the stock. Imagination Park Entertainment is currently trading at the CA$0.12 level, a critical support level below which it remains susceptible to further declines. The stock now needs to rise and stabilize above the CA$0.15 level to avert a further slide.
The stock stabilizing above the CA$0.15 mark should open the door for bulls to push it to the CA$0.20 handle, a critical resistance level. Given the strength of the downward momentum, Imagination Park Entertainment needs to rally past the CA$0.30 to turn bullish.
What Does Imagination Park Entertainment Do?
Imagination Park Entertainment is a digital content production company that creates visual content for films as well as virtual and augmented reality. XenoHolographic is the company’s proprietary augmented reality mobile platform that seeks to enhance consumer engagement and data acquisition.
CA$3 Million Capital Raise Push
Imagination Park Entertainment trading activity has received a boost in recent trading sessions. The improvement comes on the company upsizing its non-brokered private placement to CA$3 million from CA$2 million on strong demand from investors.
“We’re pleased at the investor response since announcing our private placement two weeks ago. Company insiders are participating on approximately 13% of this financing. Once this financing closes we will be very well capitalized to execute against our healthy pipeline of over 20 prospects, “said CEO Allen Paul Silverrstieen
Imagination Park Entertainment intends to use net proceeds from the offering for the commercialization of its XenoHolographic Product Suite. Part of the funds are to go towards the hiring of additional sales and marketing personnel. The company also intends to use the funds to secure patents as well as pursue strategic partnerships and opportunities.
According to the Chief Executive Officer, the new financing will not only strengthen the signing of licensees but also expand awareness on how XenoHolographic can help brands create and deploy augmented reality content.
XenoHolographic Product Suite Focus
Imagination Park Entertainment is entirely focused on offering XenoHolographic product suite in pursuit of revenues. The company has consequently reduced its involvement in the film content as it looks to build a name for itself on the on the creation of exciting augmented reality marketing content.
The Chief Executive Officer expects the increased focus to help the company achieve market leading enhancements on software production. The company is also eyeing new strategic partnerships and opportunities with leading brands looking to leverage Augmented Reality in a bid to enhance customer engagement.
“AR has been talked about for a long time, but until XenoHolographic Product Suite, AR was hard to create, manage, and deploy. With my team now focused full-time on our AR platform, we are rapidly adding new features as the market quickly evolves. This next year is going to be exciting as we execute against a full product roadmap,” said XenoHolographic Chief Product Officer, Rodney Guzman.
There is no doubt that Imagination Park Entertainment has underperformed given the 80% plus slide in share price. While the underperformance is a point of concern, the company continues to enjoy increased levels of operational efficiency.
The acquisition of the XenoHolographic product Suite is a major development that attests to the company’s long-term prospects. The fact that brands are increasingly looking for new ways to increase engagements with consumers is a development that strengthens XenoHolographic prospects when it comes to marketing.
That said, it is only a matter of time before investors take note of the opportunity at stake as the company moves to play a pivotal role when it comes to leveraging augmented reality in marketing. Given that the stock is trading at all-time lows, it would be wise to wait for it to rise above CA$0.15 mark to consider it a long-term play.
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Disclosure: We have no position in CNSX:IP and have not been compensated for this article.