Shares of Cheetah Net Supply Chain Service Inc. (Nasdaq: CTNT) experienced a sharp rally on Friday, with trading volume surging past 2.09 billion shares. The stock climbed to $0.0547, up $0.0216 from the prior close, after fluctuating between $0.0339 and $0.064 during the session. The move comes on the heels of the company's announcement of a definitive agreement to acquire Hong Kong-based Super International Trading Limited.
Acquisition Details and Revenue Commitments
Under the terms of the deal, Cheetah Net will pay approximately $4.98 million in cash to acquire all outstanding shares of Super International Trading, a trader of large industrial equipment. The transaction includes a $1.5 million refundable deposit and features performance-based earnouts: Super International must maintain annual revenue of at least $10 million for three years post-closing. If revenue falls below that threshold, the seller must compensate Cheetah; if it exceeds agreed levels, Cheetah may owe additional cash or stock. The acquisition is expected to close within three months, subject to board approvals, regulatory clearances, and due diligence.
Strategic Rationale and Business Transformation
Cheetah Net has been reshaping its business model over the past year. Originally focused on the parallel-import vehicle market, the company exited that segment in March 2025 and pivoted toward logistics and warehousing following the acquisitions of Edward Transit Express Group and TW & EW Services. Management believes that adding Super International's trading operations will strengthen cross-border trade capabilities and enhance its supply-chain offerings. CEO Tony Liu had previously cited ongoing tariff tensions and global trade uncertainty as headwinds, and the company has been actively pursuing partnerships and acquisitions to diversify revenue streams.
Financial Snapshot and Dilution Risk
For the full year 2025, Cheetah Net generated just $1.29 million in revenue from logistics and warehousing, while reporting a net loss from continuing operations of $3.65 million. Revenue jumped 182.7% compared to 2024, boosted by a full year of contributions from TW & EW, but gross profit slipped 6.6% and the operating loss widened to $4.58 million, partly due to a $731,307 impairment of intangible assets and goodwill. The company is significantly smaller than industry giants like GXO Logistics or XPO, and its market capitalization remains modest.
Adding to shareholder concerns, Cheetah Net recently established an at-the-market (ATM) stock sale program under which it may gradually sell up to $70 million in shares through AC Sunshine Securities LLC. The company is not obligated to sell any shares under the program, but the prospectus warns that if the full amount is raised at assumed prices, it would represent roughly 130% of the outstanding Class A shares as of March 31, 2026. This could lead to substantial dilution for existing shareholders.
Market Reaction and Risks
Investors appear to be betting on the acquisition's potential to transform Cheetah Net's revenue profile, but the stock remains highly volatile and is trading more like a restructuring play than a typical logistics stock. The company has acknowledged ineffective disclosure controls and internal financial reporting as of December 31, 2025, adding another layer of risk. The immediate focus is on whether Cheetah can close the Super International deal and whether the target can deliver on the $10 million annual revenue commitment.
