BABA - SINA's Go-Private Offer Raises Red Flags for Chinese Stocks
SINA's (NASDAQ: SINA) stock surged 10% on July 6 after the Chinese tech company received a go-private offer from New Wave MMXV, a British Virgin Islands-based company controlled by SINA's own CEO Charles Chao. New Wave already held a 55.5% voting stake in SINA after a share subscription agreement in late 2017. That deal issued 7,150 new Class A shares of SINA, which each had a whopping 10,000 votes per share, to New Wave.
New Wave wants to acquire the remaining shares of SINA for $41 per share in a $2.7 billion deal. However, many investors likely consider this a lowball offer, since it values SINA at just over one times next year's revenue. SINA's stock was also trading at about $120 per share just over two years ago.
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