(editor: qing nan)
in shanda games yesterday announced a $811.5 million bid for the parent company after two assets (sheng exhibition and cheng jing), capital market immediately gave a negative response, the shanda’s shares tumbled more than 20%.
negative impact not only that. Analysts believe that by Chen has created empty left hand right hand, the practice of the listed company cash flow damage the image of China’s listed companies, the future of any shares in the negative impact is immeasurable. Coincidentally, last night in the U.S. listed almost shares fell, the lead is shanda games.
school economics from Chen tianqiao, deserves to play capital player. In his business battles, business logic has been infiltrated a believer in capital of thinking deeply! Nasdaq quickly from online games to the hairline, raised capital stick after receive money, scoured mergers and acquisitions, than across games, literature, film and television and entertainment business; To play the grand network low delisting, streaming are reflected in all. Based on a parent shanda games, it was listed on the shanda split again years later and make, realize to cash out again.
Chen Internet recreation platform of broken dreams
let’s see the acquisition of shanda games this time, the object for exhibition and cheng jing. What do the two companies respectively? Give explanation is that the hold exhibition mainly offers shanda games including online billing, user authentication, customer service, the fatigue and data support and other services, including registration, payment and other performance when a user access to the grand game of user behavior data. The spectacle is for shanda distribution and promotion of the game prepaid card dealer, terminal in the country has about 180000 channels.
in fact, shanda games this acquisition is actually online, is the customer service, technical support and channels, and other functions of several departments. Shanda games need to pay service charge to the two companies, the latest cost ratio is roughly accounted for shanda to about 21% of revenue. These departments should be originally is an important part of shanda games, but in a few years ago shanda split, but not in the asset package of breakup.
about shanda online should be familiar with the site, from the initial set up, it carries with Chen’s dream of building the Internet recreation platform, by aggregating the user resources, to carry out a variety of operating platform for the basic carrier, including user account management, pay channels, customer service, technical support, a series of functions in the grand online category. For a long time, have blood transfusion and live by the shanda games business. Also rich weibo products during push him IM with you and other products, mobile phones, end, but the general effect. Hunting cloud network also learned through multiple channels, shanda online have been dismembered continuous adjustment of the basic.
trading through the time, you can see, Chen tianqiao the original architectural vision has been largely failed, new concept is injected into the grand game play mobile platforms.
the price of shanda games
from the development relations, sheng exhibition and cheng jing that these two companies is dependent shanda games, and live; On the contrary, shanda games away from the two companies also can’t exist independently. Therefore, sheng exhibition and cheng jing cannot be sold to outside the third party company, if you want to sell, can only be shanda flange. Accordingly, to hold exhibition and cheng jing two companies’ valuations.
however, sheng exhibition and cheng jing company or sold at a price of $811.5 million to shanda games.
the price is high is not high aside, first look at the big game company valuations. According to the officials announced yesterday, shanda games market value of $1.35 billion. That is to say, shanda is the price for more than half a valuation of the company.
after delisting, shanda network becomes Chen tianqiao shanda games it the only listed assets can be cashed out (cool 6 can play space is almost zero). Although sheng exhibition and cheng jing, shanda is Chen assets, but after it, Chen tianqiao is equivalent to $811.5 million from the listed company cash directly, sheng exhibition and cheng jing the two companies into the listed company’s assets.
shanda games what is the cost? By the end of the first quarter of 2013, shanda cash and cash equivalents, short-term investments, limit, get rid of loans, and dividend payable amounted to about $556 million; Also said, the time consumed shanda deal are all cash flow, and for that debt.
what’s worse, if the transactions occurred before shanda, privatization, investors can profit from it. But now, almost all the income is only into Chen pockets of the individual, shanda games existing shareholders will be a heavy burden on his back.
in addition, sheng exhibition and cheng jing the two originally should belong to shanda’s assets will not on the market value of listed companies pull up effect, on the business cooperation and join does not produce any substantive role, this is not the kind of articles from the perspective of the business. Shanda games, though has cut the cost of spending, compared with $800 million in turnover, need years to cover the purchase cost.
hollowed practice makes investors wary again
in fact, for shanda networking and shanda, the m&a transaction cost doesn’t exist, the so-called takeover did not cause any form of business changes, personnel changes, even the company phone number all need not change, only change is that the Numbers in the company accounts.
at the end of the day, this is a typical hollowed cash practice of listed companies, investors are voting with their feet, it’s not hard to explain why stock plunged shanda games today.
the practice of Chen tianqiao, already let us investors scares of the spin-off listed company. And swim just 65% of the equity is attributable to the parent company of sohu, and parent-subsidiary partitioned offering, combined with its quarterly results as expected. Also follow plunged.
literally speaking, Chen of this transaction, investors in the United States for any shares in the credit, it is a serious blow, this will only make the stocks again to shame.
from another logic, because Chen more and less value game business, the asset transfer, can be purchase or in disguised forms, shanda games the privatisation of the precursors.
after all, if you want to have a grand enterprise outside of the flange, it is absolutely impossible to accept the original business architecture. Shanda games on statement also mentioned a cleaning associated trade barriers, this or a signal.