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Over the course of the past few days, the Secoo Holdings Ltd (NASDAQ:SECO) stock has been in the middle of a remarkable rally and the same continued yesterday, as the stock ended up with gains of as much as 13% for the day. The rally in the stock yesterday took the gains over the course of the past week to as much as 40%.
In this situation, it may be a good idea for investors to take a look at a key development from earlier this week. The company announced on September 15 that it had gone into a strategic partnership with the company Aladdin Legend Technology Co Ltd.
As per the provisions of the agreement between the two companies, they are going to collaborate on the exploration of business opportunities in the luxury shopping space and other related services. In this regard, it ought to be pointed out that Aladdin is going to invest as much as RMB1.3 billion in the venture and the cooperation between the two is going to be made up of three distinct parts.
The first step is going to consist of Aladdin investing RMB100 million for the establishment of Secoo China Club. Then the two parties are going to go to work on laying out a specific high-end consumption cycle. Once that is concluded, they are going to work on the development of second-hand luxury goods transactions.
However, that is not all. The companies are also going to be jointly involved in the promotion of the China Department Store Home public circle. In addition to that, Aladdin is also going to subscribe to the shares of Secoo on the stock market with an investment of as much as RMB200 million. The rally in the Secoo stock is not particularly surprising and it remains to be seen if the stock can add to its gains this week or not.