Sky-mobi (NASDAQ:MOBI) has repurchased 16M common shares (equal to 2M U.S.-traded ADS) from VC firm Sequoia Capital at $0.985 apiece (total cost of $15.8M). That equals an ADS price of $7.88/share, or $0.11 below yesterday's close.
The repurchase is separate from the $20M buyback Sky-mobi announced in May. The Chinese mobile game publisher had $73.3M in cash and term deposits at the end of June, and no debt.
Sky-mobi's (NASDAQ:MOBI) Q2 revenue (RMB170.2M, or $27.4M) blew away guidance of RMB135M-RMB145M. For Q3, the Chinese mobile game distributor expects revenue of RMB200M-RMB210M.
Smartphones accounted for 77.8% of Q2 revenue, up from 68.1% in Q1. A 63.3% Q/Q increase in revenue from single-player games (70.3% of smartphone revenue) fueled the growth. Revenue from smartphone multi-player games rose 27.2%, and smartphone ad revenue 32.1%.
Smartphone single-player ARPU was RMB8.8, and multi-player ARPU RMB161.4. Average monthly active users for Sky-mobi's Maopao app store/gaming platform rose 20% Q/Q to ~30M, and paying game users rose to 11.9% of the total base from 10.2%.
Sky-mobi claims its services are now provided through 40K+ Chinese telecom stores, as well as 100+ distribution partner (including Baidu, Tencent, and Qihoo).
Gross margin was 25.4% vs. 25.5% in Q1 and 27.4% a year ago. Opex totaled $5.3M, +17.4% Q/Q but only +5.3% Y/Y.
optionMONSTER observes ~3K July 10 Sky-mobi (MOBI) calls were recently purchased between prices of $0.20-$0.35. Volume for the strike price (19% above current levels) was over 4x the previous open interest.
Shares now +26% since Sky-mobi announced on Wednesday it had sold a 37.9% stake in a Chinese mobile game developer, and reaped a $9.1M capital gain along the way.
Sky-mobi (MOBI) has sold its 37.9% stake in Chinese mobile game developer Fangcun to local firm Guangdong Alpha Animation. The company realized an RMB56.4M ($9.1M) capital gain on the deal.
CEO Michael Tao Song declares Sky-mobi "closely collaborated" with Fangcun on the development/distribution of hit game MonsterxMonster, and says the mobile game publisher might invest in other game developers in the future.
Sky-mobi had $95M in cash at the end of Q1. It announced a $20M buyback on May 30.
Aided by King's poor debut and general momentum stock weakness, U.S. and Chinese Internet stocks have fallen hard for the second time this week.
In addition to King rival Zynga and newly-minted VR headset maker Facebook, Twitter (TWTR -7.1%) is among the leading U.S. decliners. Exactly 3 months after reaching a peak of $74.73, shares have fallen below their post-IPO opening price of $45.10. They remain well above their $26 IPO price.
Other U.S. decliners: P -5.2%. Z -6.2%. TRLA -7%. GSVC -4.8%. SVVC -4.1%.
Sky-mobi Ltd provides mobile application platform in China. Its product are Maopao App Store, allows users to browse and download a range of entertainment-oriented mobile applications and content, including mobile games, music and books.