The recent listing of Being AI on the NZX has caught the attention of the stock exchange regulator, prompting an unusual warning to investors regarding the trading of its shares. The regulatory body, NZRegCo, issued a cautionary statement urging investors to exercise care due to a significant surge in Being AI’s share price since its debut on the market.

According to NZRegCo, Being AI’s (BAI) share price has experienced a remarkable threefold increase since its introduction to the boards on Tuesday. This sudden escalation prompted the regulator to question whether there was any undisclosed material information influencing the market dynamics.

Being AI entered the market through a reverse listing strategy, utilizing an already listed but dormant company, Ascension Capital (ACE), to facilitate its entry to the NZX. The deal was initially valued at 2.5 cents per share, but the share price skyrocketed to a high of 7.8 cents before settling at 5.5 cents in the most recent trading session.

An evaluation of the transaction concluded that it was equitable to ACE’s independent shareholders. Being AI responded to inquiries about the surge in its share price by affirming its compliance with all disclosure regulations.

In its statement, NZRegCo emphasized the importance for investors to thoroughly assess the information pertaining to the recent reverse listing of BAI before making any investment decisions. This cautionary advisory, labeled as “trade with caution,” marks the first of its kind issued by the regulator and aims to mitigate potential share price volatility.

Being AI operates across three core sectors: an AI consultancy business, a research and development division dedicated to advancing AI technologies, and a venture investment and accelerator arm. The collective valuation of these businesses is estimated to be approximately NZ$45 million.

Dave McDonald, director and co-founder of Being AI, explained last December that the decision to pursue a backdoor listing was motivated by the desire to sidestep the complexities associated with a public share offering. The company sought credibility, transparency, and access to capital markets through this strategic move.