Massimo Group (NASDAQ:MAMO) saw its shares plunge by more than 50% on Tuesday after the powersports vehicle maker disclosed that it has signed a non-binding letter of intent to acquire AI technology company FST Development Company Limited.
The proposed transaction, which values FST at between $27 million and $35 million, was described by the company as a “strategic transformation” aimed at integrating FST’s artificial intelligence capabilities into Massimo’s mobility and health technology roadmap. Despite that positioning, the market reaction was sharply negative, with investors selling the stock aggressively following the announcement.
Under the terms set out in the LOI, Massimo Group plans to acquire 100% of FST’s equity interests, based on a pre-money valuation of roughly $38 million to $50 million. Consideration for the deal could be paid in Massimo common stock, cash, or a combination of both.
The two companies have agreed to a 60-day exclusivity period to conduct due diligence and negotiate definitive agreements, with the signing of final documents targeted for late March 2026. The LOI is non-binding and does not require either party to complete the transaction.
“This transaction represents more than an acquisition—it is a strategic transformation. By bringing FST fully into the Massimo organization, we are combining our legacy of rugged, reliable vehicles with advanced AI-driven systems and software intelligence,” said Massimo CEO David Shan.
If completed, Massimo expects the acquisition to allow it to embed FST’s AI-driven control platforms across its UTV, ATV and marine product ranges, shorten development cycles, reduce R&D costs and speed up the launch of connected products. The company also plans to expand into the AI health robotics market, where FST already has operations.
Massimo Group designs, manufactures and distributes powersports vehicles, UTVs and electric mobility solutions through a nationwide dealer network.