Ten big Internet companies should consider delisted

note: this is a old one month ago, but nowadays. Therefore, xiao yun to interpret:)

article/Lin Fenglei

dell announced the privatisation of the news shocked many people nervous. This also makes the term “privatization” once again become a hot spot. In addition to choose before privatisation of Chinese stocks such as alibaba, shanda, focus, the author analyzes believed that a perfect world, taomee, shanda games and so on more than ten companies should consider privatisation.

dynamics, the analysis of the privatization of the investment, said CEO Lin Jiaxi meet the following two conditions of the company should consider privatization: 1, the company’s business requires significant transformation, listed in the state is not conducive to the transformation, such as dell, 2, the two markets (such as the U.S. stock market and the domestic stock market) have difference, the privatisation of the benefit is very high.

otherwise, according to analysts, an investment bank in addition to comply with the above two factors, if a company’s share price rising long-term downturn in the future no space, account cash a lot more than market value, even the company’s founder has strong control, more should seriously consider privatization.

these elements, the author thinks that the following company has the possibility of privatisation:

1, the online class stocks company

Perfect world

privatisation possibility: four and a half

private reasons: a. p/e ratio of only 4.8, the p/e ratio of listed companies and domestic online games as much as 40 times – 80 times. Returns will gain greater gains in domestic market.

b. holding $479 million in cash and short, and the market value of only $549 million. Private cost is low.

c. has been depressed since the second half of 2011 shares.

d. Michael chi has certain control, has a 17.6% stake, management has a 20.8% stake.

e. need to invest to web and mobile games.

progress: news for investment Banks and fund suggested that perfect privatisation, its management has been considered.

that clean out rice

privatisation possibility: four and a half

private reasons: a. the share price has been A downturn since 2012, to buy back shares of little effect.

b. holding short and $122 million, only $187 million in market value, lower cost of privatization.

c. p/e ratio is only 18 times, lower than the domestic online gaming stocks PE. At the same time, the company may have a better after delisting financing opportunities, such as attracting domestic cultural creative fund strategic stake or acquisition.

d., chairman of the board of directors has li qing has a 18.9% stake, CEO Wang Hai soldier has a 11.4% stake, the whole team executives and directors shareholding is as high as 65.5%, with strong control.

the giant network

privatisation possibility: samsung

private reasons: Amy polumbo E only eight times, is far lower than the domestic online gaming stocks 40 times PE – 80 times.

b. shi yuzhu and his daughter with a 68% stake, while the company owns a $160 million cash market value ($1.445 billion), but believe in shi yuzhu its powerful ability of capital operation to privatisation is a few minutes.

c. need to invest to web and mobile games.

shanda games

privatisation possibility: samsung half

private reasons: a. p/e ratio of only 4.2, far below the domestic online gaming stocks of PE.

b. hold $670 million in cash and short, the current market value of only $816 million.

c. needs to increase investment in web games and mobile games.

d. shanda games by shanda group holding 73%, Chen owns a 43.8% stake in shanda, with high control.

the ninth city

privatisation possibility: samsung

private reasons: a. p/e ratio is low enough to ignore, far lower than low online gaming stocks of PE.

b. value is very low, only $71.26 million, compared with $125 million in cash. The company is still facing huge losses in a row, is not equal to delisting cut into parts, and to the transformation of lightweight web games and mobile games.

c. zhu jun has a 22.2% stake, has certain control.

2, be badly in need of transformation of the company

New Oriental

privatisation possibility: samsung half

private reasons: A, new Oriental face the onslaught from other institutions of education, in addition to layoffs, and control the cost, new Oriental urgently need to speed up the transformation of network education field. And listed on the state is not conducive to the transformation.

B, new Oriental since last encounter was blowing air, still no recovery after shares tumbled to high.

C, hands still holding $842 million in cash.

D, p/e ratio for 22 times, and A part of the domestic JiaoYuGu p/e ratio is about 40 times. At the same time, more new Oriental reputation in the domestic market, there is no strong international demand.

ctrip

privatisation possibility: two stars

private reasons: A, where are facing huge threat to online travel network and mobile Internet, the need for transformation.

B, the continued downturn since 2012, with the fierce competition, the net profit declined, the next one to two years gained little room.

C, the company currently hold 660 million dollars in cash and short, the market value of $2.98 billion, if the lower market value, can consider to privatisation.

PS: ctrip shares held by management, and the p/e ratio and high market value, this is the most important reasons for the obstacles to its privatization.

3, cash is higher than the market value of the company

the following company cash while higher than its market value, could be privatised. Each company is different, of course, the author thinks that if the company strategic development point of view, has a shell company is better than the delisting.

mecoxlane

privatisation possibility: two stars

value is only $30.1326 million, and the cash is as much as $42.84 million. Since 2012, its share price has fallen, privatization seems to be a better way. But as the concept of B2C e-commerce companies, mecoxlane has been losing money, even if the delisting is difficult to have good financing channels. So the privatization is not mecoxlane is the best choice.

Skye network:

privatisation possibility: samsung half

Skye market value of $61.3204 million, and hold cash and short shot up to $94.99 million, its share price slump has up to one year. Smartphones quickly replaced the shanzhai, Skye in the short term is difficult to a greater good.

Depending on the media

China

privatisation possibility: two stars

the company’s market value of 20.4652 million yuan, the amount of cash is as high as 76.19 million yuan, it has also been on the verge of delisting. But for the company’s management, its is obviously don’t want to retreat city, even launched a rescue action. So, if China delisting that privatization is not active, but be compelled helpless.

summary: privatization may be a good thing, after all, you can find new channels of higher liquidity and transformation. But are the stocks may pay attention to the following risk: high risk, high cost of time and interest on loans back domestic public policy risk and management risk of dilution.

source: sohu IT