Q: is their potential or is their to much risk to bother
-
HUYA Inc. American depositary shares each representing one Class A (HUYA $3.34)
-
DouYu International Holdings Limited (DOYU $8.02)
Q: Hi, I know that Chinese stocks are not your focus but I'd appreciate your comments if you have any thoughts.
In October, Huya, a gaming company announced that it would buy out Doyu at 0.73 of its own share early next year. From my understanding, once the buyout ratio is confirmed publicly, the price of the bought company (Doyu) should trade very closely to the bought ratio (0.73). However, Doyu is now trading at 20% less than the closed out price.
As of Dec 11, Huya closed at $20.35 USD and Doyu is at $11.71 USD. 73% of $20.35 should be $14.85. There is a big gap between the proposed buyout price and the market price. Do you know why this is the case? The gap doesn't make sense. Thanks.
In October, Huya, a gaming company announced that it would buy out Doyu at 0.73 of its own share early next year. From my understanding, once the buyout ratio is confirmed publicly, the price of the bought company (Doyu) should trade very closely to the bought ratio (0.73). However, Doyu is now trading at 20% less than the closed out price.
As of Dec 11, Huya closed at $20.35 USD and Doyu is at $11.71 USD. 73% of $20.35 should be $14.85. There is a big gap between the proposed buyout price and the market price. Do you know why this is the case? The gap doesn't make sense. Thanks.