Iveda Solutions Inc (NASDAQ:IVDA) saw its share price tumble 35.7% on Tuesday after announcing the launch of Iveda Spain, the company's first operational hub in Europe located in Madrid.
Headquartered in Mesa, Arizona, Iveda said the Madrid office will enable it to address rising demand across Europe for AI-based video surveillance and trusted, government-grade solutions intended for public safety and the modernization of critical infrastructure. The firm described the new location as its fifth global office, joining existing operations in the U.S., Taiwan, the Philippines, and Egypt.
The company cited market projections indicating that the European smart city sector could nearly double in size to about $500 billion by 2032. Iveda framed its European debut as timely, noting that recent measures within the European Union have led to increased scrutiny of certain Chinese software providers.
Corporate statement
In a company statement, David Ly, CEO and founder of Iveda, said, "Establishing Iveda Spain represents one of the most important milestones in our company’s history. Europe is a critical market for the future of smart cities, and Madrid gives us a powerful launchpad to serve the entire region."
The company said its Madrid-based team is engaged on multiple opportunities with European systems integrators and managed service providers across both public and private sectors. Iveda also highlighted that its solutions comply with the Trade Agreements Act (TAA) and the National Defense Authorization Act (NDAA), and that they are certified by the U.S. Department of Homeland Security under the SAFETY Act DT&E Designation.
Market reaction
Despite Iveda's characterization of the expansion as strategic, investors reacted negatively to the Madrid announcement, driving the stock sharply lower during Tuesday's trading session.
The company did not provide additional financial forecasts or timing for revenue impacts related to the new office in the materials accompanying the announcement.
Outlook
Iveda presented the Madrid hub as a foothold for engagement with European partners and opportunities tied to smart city deployments, while underscoring regulatory compliance and a U.S. Department of Homeland Security certification. The immediate investor response, however, was a sizable decline in the share price following the news.