Bilibili Inc – ADR (NASDAQ: BILI) is having a great start to the trading session this morning, and for good reason. The company announced that it has entered a definitive agreement, under which it would receive a large equity investment. Of course, the news excited investors, sending the stock screaming for the top. Today, we’ll talk about:
- The equity investment;
- what we’re seeing from BILI stock as a result; and
- what we’ll be watching for ahead.
BILI Soars On Equity Investment
As mentioned above, Bilibili is having an incredibly strong day in the market today after the company announced an equity investment. In a press release issued early this morning, the company said that it entered into a definitive agreement with Tencent. Under the terms of the agreement, Tencent will invest an aggregate amount of about $317.6 million in cash into BILI.
According to the share purchase agreement, BILI will provide Tencent with 25,063,451 newly issued Class Z ordinary shares in exchange for teh $317.6 million in cash. The purchase price under the agreement comes to $12.67 per Class Z ordinary share, which is equivalent to the ADS price.
It is expected that the transaction will close relatively soon, but it is still subject to customary closing conditions. At the closing of the transaction, Tencent will own approximately 12.3% of BILI.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of BILI, the news proved to be overwhelmingly positive. After all, this large invetment puts quite a bit of funding in the company’s hands, opening the door to opportunity ahead. So, it comes as no surprise that excited investors are sending the stock screaming for the top. Currently (10:31), BILI is trading at $14.89 per share after a gain of $1.58 per share or 11.87% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on BILI. In particular, we’re interested in following the story to see how the company uses the newly-generated funds from this transaction. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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