The prospect is unpredictable, Can Huanji & Nasdaq to find a way out?
According to Unshared News: Crossed the ocean on Nasdaq 9 years agoThe listed Huanju Group may now bid farewell to the US capital market by way of privatization.
On August 26, there were media reports that Li Xueling, Chairman of Huanju Group, and Xiaomi Lei Jun, the founder of the group, plans to privatize Huanju Group, which may be valued at US$8 billion.
On August 27, Huanju Group responded that the company had not received any privatization invitation. However, according to the latest news from 21st Century Business Herald, Li Xueling and Lei Jun have indeed negotiated with banks to finance the transaction and use Huanju’s $4.9 billion in cash and cash equivalents as collateral to obtain loans. They plan to complete the transaction before the end of 2021.
In addition, because Li Xueling and Lei Jun both believe that Huanju is undervalued in the US market. Therefore, Lei Jun and Li Xueling plan to subsequently spin off the company’s key asset BIGO and list it in Asia (possibly Hong Kong) to take advantage of the higher valuation.
In 2015, it has not been renamed Huanju Group’s Huanju Era, Has also received privatization offers from Lei Jun and Li Xueling. However, due to the high price of the privatization offer, the return ended in June 2016. Huanju has also become the first “loser” in the privatization of China’s concept stocks. A vigorous privatization has completely turned into a farce.
Over the past six years, with the changes in the domestic and foreign regulatory environment, China concept stocks have been constantly questioned. Under the unpredictable prospects, “return” has become a trend choice for many China concept stocks. Only in 2020, Jumeiyoupin, 58.com, Tour, Bitauto, Sina and other Chinese concept stock companies have completed privatization and delisting.
In 2021, there will be another fluency, Such as HanHolding, Sogou Wait until privatization has been completed or in progress. At the same time, Haro Travel, Himalaya, Zero Krypton Technology, and Keep, which were previously planning to go public in the United States, have decided to suspend.
It can be said that it is not surprising that Huanju Group wants to be privatized. In November last year, there was news that Huanju plans to go public on the Hong Kong stock market, and there has been no news since then. So this time, can Lei Jun lead it back smoothly and find a way out?
Relying on overseas after losing domestic business
On August 27, Huanju’s stock price fell nearly 5% before the market. At present, Huanju’s latest share price is approximately US$60, and its market value is approximately US$4.7 billion. Compared with the historically highest price of US$147.86/share in February this year, Huanju’s stock price has fallen nearly 60% in the past six months.
According to related news, Li Xueling and Lei Jun hope to privatize Huanju at a price of US$75 to US$100 per share. This means that if the stock price is higher than the current price of 15 to 40 US dollars, the pressure of privatization funds is not small.
According to the company’s data, Huanju Group’s operating entity, Guangzhou Huaduo Network Technology Co., Ltd. (“Guangzhou Huaduo”), is headquartered in Yangcheng Creative Park, Tianhe District, Guangzhou, and has branches in Zhuhai, Beijing, and Shanghai.
In March 2021, the Huanju Group quarterly report showed that Li Xueling held 23.2% of the shares and had 76% of the voting rights; Lei Jun held 7.8% of the shares through Top Brand Holdings Limited, but Lei Jun gave all the voting rights he held to Li Xueling.
Huanju was founded in April 2005, Netease The editor-in-chief Li Xueling left to start his own business and founded DuwanGame.com, the predecessor of Huanju.
At that time, Lei Jun invested 1 million US dollars as an angel. In 2008, YY voice software was launched. In November 2012, Huanju Times was listed on NASDAQ. It has a market value of only 600 million U.S. dollars in the age of joy, which has a series of product lines such as YY voice, YY game operation, and YY education.
At the end of 2018, Huanju announced that its globalization and AI strategy will concurrently force overseas markets. In December 2019, Huanju Times acquired the live broadcast platform BIGO LIVE and changed its name to Huanju Group. In 2020, celebrations were the domestic business eye teeth Live and YY Live are sold to Tencent And Baidu.
After selling YY to Baidu, Huanju encountered muddy water shorts. In November last year, Muddy Water released a 71-page short-selling report on Huanju Group, which believed that Huanju Group’s data including revenue, profit, and paying users were suspected of fraud. Once the report was released, Huanju Times stock price plummeted by 26.48%.
On February 9 this year, Huanju Group issued an announcement stating that Muddy Water’s allegations and conclusions about YY’s live broadcast business have not been confirmed after a comprehensive review. The sale of its YY live broadcast business to Baidu has basically been completed.
However, on August 17, Huanju issued an announcement stating that the acquisition transaction time has been postponed and the approval process has not yet been completed.
In the past 16 years, Huanju has grown from the initial multi-play community and YY voice to YY live broadcast + Huya, and then lost Huya and YY live broadcast two major revenue-increasing engines. The business of Huanju Group now mainly depends on the live broadcast product BIGO and short video applications. Likee, video social application imo and gaming social application Hago headed the overseas sector.
Over the past years, Huanju Group has continued to suffer losses, and its main business profitability has continued to be under pressure.