Biz Daily: Why Chinese publishers are delisting from NASDAQ

hello and welcome to his daily I'm John Jordan today you were talking about Chinese companies who are putting themselves off the NASDAQ now this might seem like a very technical subject and two degree it is but actually is showing a really interesting trend that's happening in a moment so the kind of key to this trend story is that one Chinese PC or mobile publisher called Kong John which is floated on the Nasdaq Stock Exchange which is often American technical stuff technology exchange and it's announced today that it's considering a bid to take the company private effectively that means that someone has come in and said they want to buy all the shares of the company that are currently available to trade on nasdaq buy them all back effectively then taking the company from a floated

company on a nest egg to a privately held company what's interesting in this case it's at the person who's doing the bidding on this kind of code proposal is the company's CEO who's being backed by a venture capital company in China so basically what they've done is they've put in a bid that values the company more than its current share price that's kind of giving an incentive for current people holding the shares to sell the shares for a profit and then the company that goes private and there's come up controlled by the venture capitalists who then presumably sell it off to someone else so the reason the companies do do this it happens regularly on to talk exchanges around the world is a company's kind of believe they're not being properly valued by the stock exchange their own they're not being probably valued by investors and they kind of feel they would do better if they weren't on the stock exchange having their canoes value all the time or seasonal stock exchange any small bit of news can make your shares go up or

perhaps more bullied down every four months you have to show how your company's performing you know what its sales are what its profit is what any kind of issues just be very transparent and certainly for the top management in companies it can be very time consuming to have to be a a company that's floated on a stuffing change anywhere in the world not particularly in it been a snake so this seems like a very technical and kind of subject to the particular there are some reasons that the guys at conroe want to do this so this would be like a small story wouldn't involve talking about this in the biz daily apart from the fact though that this is the fourth Chinese company in the last year to do a similar move so current going to go back in time why are all these Chinese companies on the nez deck in the first place so China for a long time has been a very strong pc games market her mostly China is a very big company a very big country over billion people has never had consoles and so you know pieces always been a massive well the biggest

gaming sector for the Chinese and two out of this some very big companies have evolved and correct for them financially to melted they make money by selling their services and selling their games generate profit off that but if you're growing very fast you want to kind of have more gonna have more investment money so one of these is way of doing this for the into a certain size is to sell your shares on the stock exchange for those Chinese companies the Chinese stock exchanges maybe there's a kind of one in Hong Kong and one in Shanghai and one in Xinjiang the main ones and now they're kind of fairly mature comstock James is still not the same as as floating in in say the next deck or the New York exchange all on the stock exchange and let's grow up well known stock exchanges let's do a little bit kind of localizing is restricted on what you can do with us years and who can buy the shares so for a long time Chinese companies have come to the US market particular Nasdaq market to kind of threat their companies and gain investments they can kind of speed up

their growth now what we're seeing is they kind of come to the conclusion that the nest deck isn't the place for than perhaps they don't feel like us investors like games companies very much there's been some very big her more receive some very big companies like a king and Zynga who were floated Kings on the new york stock exchange and Zynga's natick they floated and they've their shares a color called underwater so this year's are still valued less than when they floated so perhaps it's like these chinese couple of singers games are not being properly valued by US investors there's another issue that the Chinese markets have over the years become more mature so maybe this comes in the game would be better off in China that's kind of a radical the moment because the Chinese markets are going through an absolutely awful kind of three months so even though they're up a year-on-year they doubled the Chinese don't you change the moment is in is kind of in meltdown so half the companies on the satellite

exchange contacts used buyer seller shares the moment they've actually kind of withdrawn themselves from sale and that's basically because the markets down third percent over the last month and it's basically the Chinese government stepping in and trying to get people to buy shares and the college this weird kind of has China off news this week had a mixture of a kind of communist big tats and market forces it is now currently drawing those markets so perhaps the Chinese market on the best place for these comments to go anywhere they'd made the decision as I said it's not just there are more companies who are doing this so the norm of them have regretted it but it'd be kind of really interesting one last year was a Shandy games they're quite big company again PC bit of mobile and they went through the most torturous process eventually they did go private but them again it was like young Hong Kong they don't kind of a their ex co put together a bit with some other companies to take the company private it was considered for a while and then the company of the investment investment companies who were

they were backing the bid all suddenly changed and you had this kind of over the process of six months you had all these different companies actually changing and another Chinese games company got involved for a while and they pulled out a lil bottom it's very very kind of messy processing because these are publicly traded companies have to be very transparent clin that deal went through but it was very bad i think the reputation of chander game so I'm sure hong kong is attempting not to do that um the other companies who are on their stake who are going through a similar process probably not as convoluted are imperfect world again there another big Leslie probably pretty one more Western kind of oriented are the Chinese games companies so they are considering a management buyout a management buyout so sit some vets and venture investments of alleged guys had put together some money to buy that company back and another one is I dream skype there that's a little more peculiar because I dreams guy only floated about a year ago so it's quite weird that they're kind of pulling back

off the decision to float and then suddenly decided I don't want it and I think it'd just be kind of trend we're seeing here is that the Chinese kind of games companies they kind of see them or slightly differently I think two other say more Western companies i mean i think it we've definitely bit a bit careful china is it a very different kind of culture that financial culture is very different obviously the government has much more influence whom Hakkasan in china on a cultural level on a political level on a legal level and on a financial level i do you think it's interesting that while pretty much all big chinese games companies now are looking outside china say whether they're looking to Southeast Asia or Korea or maybe a lot of now looking to Western markets and looking particular mobile to looking now to kind of them aggressively release games in North America and Europe or licensed games for his markets or you know that steps this is a big growth area now to become truly international companies there's some of the biggest companies Chinese companies who have been international in the sense

that their financial and shares have been available to buy and sell directly retrenching I guess in all these cases will be interesting to see what the end what the end game for these companies is is the end game that they just stay private and it just kind of operate in a kind of a you know in a private matter like lots of company to a private you don't have to be able to stock exchanges no laws and says come to throw some exchange but will be interesting to see I guess in the long run whether if they list on Chinese stock markets in the end they kind of feel like the Chinese investor will understand them or read them more favorably than western investors have where there's maybe a little bit more tension between Western outlook on games per se and maybe on Chinese companies as well so we'll keep our eye on that one but it is certainly fascinating I guess as we say be very careful if you're investing in companies I happy very careful you're investing in game games is the games might be great but the share price doesn't always go up okay

well I came from catching tomorrow we'll have some more news see you then