Jan. 27, 2014, 10:00 AM
- Shanda Games (GAME +10.8%) has received a non-binding going-private proposal letter from parent Shanda Interactive and an affiliate of Chinese investment firm Primavera Capital. The offer, meant to be financed through a combo of equity and debt, values Shanda Games at $1.9B, or $6.90/share. (PR)
- Shanda's board is evaluating the offer; the would-be acquirers already own 76.2% of the company.
- Though up sharply, shares still trade 9% below the offer price, which suggests a fair amount of investor skepticism exists. Peer Giant Interactive (GA +1.1%) received a going private offer in November. Giant's shares still trade 7% below their offer price.
Jan. 3, 2014, 2:21 PM
- SA contributor Ottoman Bay Research accuses Giant Interactive (GA -3.8%) chairman Shi Yuzhu of siphoning "tens of millions of dollars of shareholder cash out of the company and into his own private equity firm," courtesy of investments made by Giant that have seen heavy losses.
- Ottoman also points out "independent director" Jason Jiang, who happens to be on the special committee evaluating Shi's $11.75/share going-private offer, is a founding partner of Shi's P-E firm, and thinks Jiang will likely have to resign.
- The firm is skeptical of Shi's willingness to make good on his buyout offer, and notes he has sold 11% of his stake in recent months at levels well below the offer price. It also observes buyout partner Barings Private Equity is "no stranger to walking away from bad businesses even after proposals were made," and thinks Giant's 61% op. margin warrants scrutiny, given it's far higher than that of peers such as NetEase, Shanda, and Perfect World.
Nov. 25, 2013, 11:13 AM
- Giant Interactive (GA +11.5%) founder/chairman Yuzhu Shi and P-E firm Baring Private Equity Asia have offered, through a preliminary non-binding proposal letter, to take the Chinese online game developer private for $11.75/share, or $2.8B. (PR)
- The price represents a 16% premium to Giant's Friday close, and a 4% premium to where shares currently trade. Shi and Baring collectively own 47.2% of Giant.
- Shi is far from the first founder of a Chinese tech company to make a going-private offer. His proposal values Giant at a little over 9x 2014E EPS after backing out $610M in cash/investments.
Nov. 6, 2013, 5:06 PM
- SolarCity (SCTY) expects Q4 revenue of $40M-$46M ($22M-$24M in operating lease revenue, $18M-$22M in systems sale revenue) and EPS of -$0.55 to -$0.65 vs. a consensus of -$0.47. 101MW are expected to be deployed, a figure that meshes with existing full-year guidance of 278MW. 2014 guidance for 475MW-525MW in deployments has been reiterated. Shares -2.7% AH, giving back a small portion of the year's big gains. (Q3 results, PR)
- Giant Interactive (GA) expects Q4 revenue to "grow moderately" relative to a Q3 level of $96.4M. That suggests the company could miss a Q4 revenue consensus of $101.8M. Shares unchanged AH for now. (Q3 results, PR)
- Following a Q3 miss, Rosetta Stone (RST) expects 2013 revenue of $270M-$280M and EPS of -$0.12 to -$0.01, below a consensus of $286.5M and $0.01. The language software vendor blames "lower pricing and softness" in retail channels for its near-term issues. Shares -11.2% AH. (Q3 results, PR)
Sep. 30, 2013, 9:26 AM
- BlackBerry (BBRY) has been upgrade to Market Perform by Bernstein. Shares nonetheless -1.4%, following equity futures lower.
- Accenture (ACN) has been upgraded to Hold by SocGen. Shares sold off on Friday in response to the company's soft FQ1/FY14 guidance.
- Xilinx (XLNX) has been upgraded to Outperform by Pac Crest. Shares -0.6%.
- Telecom Italia (TI) has been upgraded to Neutral by JPMorgan following reports CEO Franco Bernabe is set to resign, a move that could clear the way for Latin American asset sales. Shares +3.1%.
- RealPage (RP) has been cut to Underperform by Credit Suisse. Shares -3.5%.
- Chinese online gaming firm NetEase (NTES) and Giant Interactive (GA) have been started at Buy by BNP Paribas.
- Marketo (MKTO) has been started at Outperform by Wells Fargo.
- CyrusOne (CONE) has been started at Overweight by Evercore.
Aug. 30, 2013, 10:29 AM
- Today's downturn in Chinese game makers is outpacing a broader tick down in the Chinese tech space (CQQQ -0.2%). Perfect World (PWRD -1.5%), NetEase (NTES -4.7%), and Giant Interactive (GA -2.4%) are falling in sympathy after Shanda Games (GAME) was walloped yesterday following a Q2 beat.
- NetEase is the lame duck, as a downgrade from JPMorgan to Neutral (albeit with a PT hike to $75 from $65) weighs the stock.
Aug. 20, 2013, 3:22 PM
- Shares of Perfect World (PWRD -6.6%) continue the descent they began during AH yesterday. Although the Chinese web/mobile game maker beat Q2 consensus and issued strong Q3 guidance, investors appear to have been left wanting.
- A chief concern is ballooning costs. Cost of revenue grew 37% Y/Y in Q2 while opex grew 18.6% Y/Y. Revenue was up 4.7% in the same period. Marketing expenses were the largest culprit, up 60.1% Y/Y. Pacific Crest noted, "Q3 guidance is strong but spending is expected to remain elevated."
- Morgan Stanley chopped its rating earlier today to Equal Weight from Overweight following Perfect World's Q2 release: "This mainly reflects rich valuation. Perfect World is trading at 10.7x 2014e P/E, vs. 4.6-10.8x for peers." However, the bank raised its PT to $20, reflecting its expectation of strong revenue growth in 2H on the back of "strong reception of new games such as Saint Seiya Online and Swordsman Online."
- Perfect World is up 81.1% YTD, its climb nearly two-fold that of peers.
- Other Chinese game makers: Shanda Games (GAME), NetEase (NTES), Giant Interactive (GA)
Jul. 29, 2013, 12:35 PM
- Shanda (GAME) is nosediving as investors balk at the price it's paying to acquire affiliates responsible for handling its online game billing and customer service work, among other activities.
- One of the affiliates (Shengzhan) owns valuable data about user activity. The other (Shengjiang) runs a network that sells 2M+ real/virtual prepaid gaming cards via 180K distribution channels.
- Shanda claims service fees paid to the affiliates made up 21.3% of its Q1 revenue, and that buying the companies will help it deliver the kind of integrated platform it considers crucial for mobile success.
- Shanda is paying for the deals with cash, deferred payments, and the settlement of an outstanding loan receivable.
- Shares had more than doubled since early May before today's plunge.
- Fellow online game providers NetEase (NTES -2.6%), Qihoo (QIHU -4.1%), Perfect World (PWRD -5.3%), and Giant Interactive (GA -5%) are selling off. Sohu and subsidiary Changyou's disappointing Q2 results and Q3 guidance are the main trigger, though a moderate selloff in Shanghai isn't helping either.
Jul. 29, 2013, 8:31 AM
- Shanda Games (GAME) -7% premarket after agreeing to acquire affiliates providing user and payment platform services from its parent company Shanda Interactive Entertainment for a combined $811.5M.
- GAME says the moves will strengthen its mobile strategy.
- Other players in Chinese gaming: SOHU, RENN, NTES, PWRD, GA.
Jun. 24, 2013, 1:23 PM
Chinese Internet and solar stocks fall hard after growing banking sector liquidity worries contribute to a 5.3% drop for the Shanghai Composite. Notable decliners: YY -13%. DANG -9%. GA -8.9%. PWRD -7.2%. YOKU -6.6%. SOHU -5.8%. NQ -5.6%. CSIQ -8.4%. TSL -8.3%. LDK -7.5%. JKS -6.9%. JASO -6.9%. DQ -7.1%. SOL -6.7%. Meanwhile, Bloomberg observes many Chinese solar firms, including Trina, JinkoSolar, and Canadian Solar, are moving production overseas to counter EU import tariffs.| Jun. 24, 2013, 1:23 PM
Jun. 6, 2013, 9:10 AM
Jun. 4, 2013, 5:37 PM
Giant Interactive (GA) -5.9% AH after filing to sell 15.1M shares (6.3% of outstanding shares) on behalf of a Virgin Islands-based holdings company owned by founder/chairman Yuzhu Shi's daughter. Following the offering, Shi's effective ownership stake in Giant will fall to 48.5% from 54.8%. News of the offering comes with shares of the Chinese game developer having closed near multi-year highs. (prospectus)| Jun. 4, 2013, 5:37 PM
Feb. 26, 2013, 5:02 PMGiant Interactive (GA): Q4 EPS of $0.23 beats by $0.02. Revenue of $91.8M (+15.5% Y/Y) beats by $0.84M. Shares +5% AH. (PR) | Feb. 26, 2013, 5:02 PM
Aug. 14, 2012, 12:23 PM
Perfect World (PWRD +6.6%) rallies after Citi starts coverage with a Buy as part of a broader launch for Chinese gaming stocks. The firm notes PWRD trades at almost zero equity value exc. net cash due to concerns about declining sales, and predicts existing games and overseas licensing will keep cash flow healthy. Citi also thinks a dividend could arrive later this year. Also receiving Buy ratings (I, II) are Changyou.com (CYOU +0.5%) and Giant Interactive (GA +2%).| Aug. 14, 2012, 12:23 PM | 2 Comments
Mar. 6, 2012, 8:54 AM
Mar. 2, 2012, 3:57 PM
Chinese online gaming concern Giant Interactive (GA +6.4%) is upgraded to Buy with a price target of $6 from $4 at Roth Capital, which anticipates more "solid" top-line growth and free cash flow in Monday's Q4 report while there's "decent upside potential" for a positive 2012 view on strength from new games.| Mar. 2, 2012, 3:57 PM