In recent years, most people who have bet on the United States are optimistic about the asset of Street Power. If there is no Street Power, most investors would have run early.
Editor’s note: This article comes from WeChat public account “Alpha Works” (ID: alpworks ), Author Sun Jiabao.
After the failure of the first privatization in 2016, CEO Chen Ou once again throws out the privatization plan of Jumei Youpin (NYSE: JMEI).
As one of the earliest companies to enter the beauty makeup e-commerce and online celebrity marketing, Jumei Youpin not only did not take the ride of the current online celebrity economy, but was also jokingly described by investors and netizens as “eating ugly”, Nothing. ”
I ’m going to show you how Jumei Youpin shattered a good hand.
The core business was hit hard
Senior investors in China Stocks definitely know how good Jumei Youpin was in the year. If you come to talk about beauty e-commerce and online red live broadcast, what vibrato, Ruhan (NASDAQ: RUHN), Saturday (SZ: 002291) ), A few years ago these were little brothers.
In less than three years of its establishment, Jumei Youpin had sales of over 6 billion yuan in 2013 and a market share of 22.1%. It is the first e-commerce company in China to make a profit for 7 consecutive quarters before going public.
On May 16, 2014, Jumeiyoupin was listed on NASDAQ as the “China Beauty E-commerce First Share” with an issue price of US $ 22. At its peak, the stock price reached $ 37.99 and the market value reached $ 5.5 billion.
However, the ensuing turmoil of fakes caused Jumei Youpin, the enthusiastic one, to fall to the altar.
Jumei Youpin has been self-operated + third-party platform business since its establishment. The third-party platform business draws a certain percentage of commission profits from the turnover.
In July 2014, Jupeng Hengye, a third-party merchant of Jumei Youpin, was concentrated in selling fakes. Kunpeng Hengye sold fake clothing and watches through e-commerce platforms by falsifying documents such as brand authorizations and customs declarations.
At that time, e-commerce providers including Jumei Youpin, Jingdong Mall, and No. 1 Store were all pulled into the water. But this incident has the most serious impact on Jumei Youpin. Several US law firms have announced that they will initiate class actions on behalf of investors in Jumei Youpin.
The old employee of Jumei Youpin once said, “At that time, Jumei Youpin was just listed, and the founder was so high-profile, any emotional release and questioning will be magnified infinitely.”
After that, Chen Ou directly cut off the luxury goods business on the third-party platform and turned all the beauty business on the third-party platform into self-employment. That is to say, do not do third-party platform business, only do self-employed.
For Jumei Youpin, where more than half of its turnover comes from third-party platform business, this not only meansIt means that the revenue decline will affect the number of users.
Just like this, the stock price of Jumei Youpin has started to fall. Six months after its listing, the market value of Jumei Youpin has fallen from a peak of US $ 5.5 billion to approximately US $ 1.9 billion, a shrinkage of more than 60%.
Investment in non-core business, street electricity becomes the top pillar
After cutting off the third-party platform business, Jumeiyoupin has repeatedly changed its strategy.
The transition to cross-border e-commerce began in the third quarter of 2014.
Beginning in 2015, Jumei Youpin opened another extremely fast duty-free shop with another 1 billion yuan, and eliminated consumers ’doubts on counterfeit goods through“ global direct mining and platform self-operation ”. This business has grown rapidly, and traffic and revenue have increased.
The financial report for the second quarter of 2015 showed that its net revenue was US $ 308.1 million, a year-on-year increase of 100%; of which net profit attributable to ordinary shareholders of the company was US $ 17.1 million, a year-on-year increase of 11%.
But it still cannot restore the confidence of the capital market in Jumei Youpin. After a brief rebound, the stock price continued to fall.
Chen Ou also did not continue to die on e-commerce, but began to make frequent cross-border investments in search of new growth points.
In July 2015, Jumeiyoupin invested US $ 250 million in a vertical baby tree (HK: 01761), holding 11.6% of the shares.
This investment has not brought a generous return to Chen Ou. In 2018, Chen Ou sold 4% of the baby tree to Alibaba for $ 86.5 million, and still holds 3.33% of the shares.
In May 2017, Jumei Youpin announced the acquisition of the shared charging brand “Street Power”. As of March 31, 2019, Jumei Youpin held an 82.07% equity interest in Jidian.
Facts have proved that when Jumeiyoupin’s e-commerce business declined year after year, the revenue of the shared power bank increased sharply from 73.73 million yuan in 2017 to 879 million yuan in 2018, accounting for the total revenue. 22%, becoming the new pillar of Jumei Youpin.
In recent years, most people betting on the United States are optimistic about the assets of Street Power. Without Street Power, most investors would have already run away.
Co-founder leaves after first privatization fails
In February 2016, the share price of Jumei Youpin fell to US $ 6, and its market value shrank by 73%. Chen Ou proposed to 7The price of Yuan is to privatize Jumei Youpin.
For the specific reasons for privatization, CEO Chen Ou stated in an open letter that Jumei Youpin is seriously underestimated in the US stock market. Privatization means that the company enters the entrepreneurial process again.
At the time, this was strongly resisted by Jumei shareholders. The $ 7 privatization price is less than one-third of the issue price, which seriously hurts the interests of shareholders.
The stock price of Jumei Youpin has been declining all the way, even below US $ 3, which makes Jumeiyou’s privatization offer lose its practical significance. Chen Ou was once dubbed by investors as “Three Chens”.
The privatization has not yet been completed. On July 26, 2017, Jumei Daipin co-founder Dai Yusen announced his departure and joined Zhenge Fund as a partner.
After Dai Yusen’s departure, the privatization of Jumei Youpin has not been completed. Jumei Youpin also lost its credibility in the capital market.
On August 30, 2017, Peter Halesworth, a lead partner of Jumei Youpin’s stock holder Heng Ren Partners LLC, issued an open letter saying that under the background of the booming e-commerce in China, Jumeiyou A series of mistakes after the company announced its privatization caused its stock price to plunge 45.2%.
At the same time, the book cash announced by Jumei Youpin at the end of 2016 was US $ 331 million (equivalent to 87% of the market value of Jumei Youpin, more than double the amount of book cash in 2014, and the amount of cash held before the IPO). Three times), but Jumei Youpin has never paid a dividend to shareholders.
In November 2017, Chen Ou withdrew the privatization offer. Later, Jumei Youpin has repeatedly tried to raise the stock price by means of repurchase, etc., but none of them could make a substantial turn in the stock price.
The goal of low-price privatization is street electricity?
The only thing that moves Jumei Youpin’s stock price is a joint stock.
On January 1, 2020, Jumeiyoupin announced that it would adjust the ratio between ADS (American Depositary Shares) and Class A ordinary shares from 1 ADS on behalf of 1 Class A ordinary share to 1. ADS stands for 10 Class A ordinary shares, which became effective on January 10.
Two days after the effective date, that is, January 12, Jumei Youpin announced that it will be privatized again. Proposed privatization at a price of $ 20 per ADS. Once the transaction is completed, it will be delisted from the NYSE and Jumei Youpin will become a private company.
On the surface, the purchase price of Jumei Youpin’s privatization is higher than the previous one. In fact, Chen Ou’s price of $ 20 per ADS is equivalent to $ 2 per share before the joint venture, not only lower than The last privatization was $ 7, much lower than the 2014 IPO issue price of $ 22.
The reason for privatization given by Chen Ou this time is the same as last time, that is, the liquidity of small-cap stocks is relatively poor.Some shareholders have repeatedly proposed privatization proposals.
Actually, discerning investors have long questioned that the original intention of Chen Ou’s privatization was not a liquidity issue, but it was more likely that he saw the asset of Street Power and wanted to privatize it at a low price before listing.
It makes sense for investors to question. One of the clues is that Jumei Youpin has not announced financial results since the second half of 2018. The 2019 financial report has been pushed back and forth until now.
There are two consequences of not making a financial report:
First, institutional investors are no longer optimistic about the company and are selling. The stock price is lower.
Second, individual investors can’t see the data of Street Power, shake the investment position, sell, and the stock price is lower.
Different routes to the same goal. Failure to report earnings will lower stock prices.
Why is lower share price the most desirable situation for Chen Ou?
Because this means that he can directly privatize the high-quality asset of Street Electric at a low price, and then return to the Hong Kong Stock Exchange or the science and technology board to go public again.
The previous data has proven that Street Power is a high-growth quality asset. In the first half of 2018’s financial report, we can see that Street Electric had nearly 1 billion yuan in revenue in 2018.
According to data from Ai Media Consulting, 2019 should not be bad either.
The number of China’s shared power bank users is expected to exceed 300 million in 2019. In the first half of 2019, the share of China’s shared power bank users was ranked first in the industry with 40.5%, and the proportion of small power, monsters and calls They were 23.6%, 20.9%, and 11.7%, respectively.
Assuming that each person spends 15 yuan per year, this means that Street Electric’s revenue in 2019 will double year-on-year.
Can the second privatization succeed?
According to the latest data disclosed by Jumei Youpin, Chen Ou and its related parties hold a total of 42.9% of Jumei Youpin and have 88.3% of the company’s voting rights.
Compared to the 2016 privatization, the voting rights of the buyer group did not seem to have improved. In the last privatization, the buyer consortium of Jumei Youpin included Chen Ou, Dai Yusen, and Sequoia Capital, which collectively accounted for more than 90% of the voting rights.
So it’s bad to say whether this time can be successfully privatized.
Furthermore, companies that are listed on the US stock market after registering a company in Cayman or Bermuda must comply with several rules when privatizing:
First, voting rules for the privatization of Cayman or Bermuda-registered companies.
If a listed company is to be privatized through an agreement arrangement, in addition to the approval of 75% or more equity, and no more than 10% or more equity objection, it also needs to pass a mechanism commonly known as “several heads” to obtain More than half of the shareholders present agreed.
Second, the US Securities and Exchange Commission has two main conditions for the delisting of privatization: one is initiated by a controlling shareholder, and the other is that the acquisition of tradable shares requires fullThe department carried out in cash.
Based on the current market value of US $ 200 million for Jumei, Chen Ou needs to pay approximately US $ 118 million. In the offer letter, Chen Ou stated that the privatization will be financed by a combination of borrowing and equity financing, and the loans will be provided by third-party institutions.
It is unknown whether Jumei Youpin can meet the above conditions. Moreover, it is likely to face class actions by minority shareholders. After all, in the US capital market, due to the low purchase price of privatization, deliberate plagiarism and arbitrage have triggered widespread class action among shareholders.
As for Jumei Youpin, no matter if you are not doing business, or you are not in a good time, who would have thought that the first share of beauty e-commerce in that year will end with privatized street electricity.
After cutting off the third-party platform business, Jumeiyoupin has repeatedly changed its strategy.
The transition to cross-border e-commerce began in the third quarter of 2014.
Beginning in 2015, Jumei Youpin opened another extremely fast duty-free shop with another 1 billion yuan, and eliminated consumers ’doubts on counterfeit goods through“ global direct mining and platform self-operation ”. This business has grown rapidly, and traffic and revenue have increased.
The financial report for the second quarter of 2015 showed that its net revenue was US $ 308.1 million, a year-on-year increase of 100%; of which net profit attributable to ordinary shareholders of the company was US $ 17.1 million, a year-on-year increase of 11%.
But it still cannot restore the confidence of the capital market in Jumei Youpin. After a brief rebound, the stock price continued to fall.
Chen Ou also did not continue to die on e-commerce, but began to make frequent cross-border investments in search of new growth points.
In July 2015, Jumeiyoupin invested US $ 250 million in a vertical baby tree (HK: 01761), holding 11.6% of the shares.
This investment has not brought a generous return to Chen Ou. In 2018, Chen Ou sold 4% of the baby tree to Alibaba for $ 86.5 million, and still holds 3.33% of the shares.
In May 2017, Jumei Youpin announced the acquisition of the shared charging brand “Street Power”. As of March 31, 2019, Jumei Youpin held an 82.07% equity interest in Jidian.
Facts have proved that when Jumeiyoupin’s e-commerce business declined year after year, the revenue of the shared power bank increased sharply from 73.73 million yuan in 2017 to 879 million yuan in 2018, accounting for the total revenue. 22%, becoming the new pillar of Jumei Youpin.
In recent years, most people betting on the United States are optimistic about the assets of Street Power. Without Street Power, most investors would have already run away.
Co-founder leaves after first privatization fails
In February 2016, the share price of Jumei Youpin fell to US $ 6, and its market value shrank by 73%. Chen Ou proposed to 7The price of Yuan is to privatize Jumei Youpin.
For the specific reasons for privatization, CEO Chen Ou stated in an open letter that Jumei Youpin is seriously underestimated in the US stock market. Privatization means that the company enters the entrepreneurial process again.
At the time, this was strongly resisted by Jumei shareholders. The $ 7 privatization price is less than one-third of the issue price, which seriously hurts the interests of shareholders.
The stock price of Jumei Youpin has been declining all the way, even below US $ 3, which makes Jumeiyou’s privatization offer lose its practical significance. Chen Ou was once dubbed by investors as “Three Chens”.
The privatization has not yet been completed. On July 26, 2017, Jumei Daipin co-founder Dai Yusen announced his departure and joined Zhenge Fund as a partner.
After Dai Yusen’s departure, the privatization of Jumei Youpin has not been completed. Jumei Youpin also lost its credibility in the capital market.
On August 30, 2017, Peter Halesworth, a lead partner of Jumei Youpin’s stock holder Heng Ren Partners LLC, issued an open letter saying that under the background of the booming e-commerce in China, Jumeiyou A series of mistakes after the company announced its privatization caused its stock price to plunge 45.2%.
At the same time, the book cash announced by Jumei Youpin at the end of 2016 was US $ 331 million (equivalent to 87% of the market value of Jumei Youpin, more than double the amount of book cash in 2014, and the amount of cash held before the IPO). Three times), but Jumei Youpin has never paid a dividend to shareholders.
In November 2017, Chen Ou withdrew the privatization offer. Later, Jumei Youpin has repeatedly tried to raise the stock price by means of repurchase, etc., but none of them could make a substantial turn in the stock price.
The goal of low-price privatization is street electricity?
The only thing that moves Jumei Youpin’s stock price is a joint stock.
On January 1, 2020, Jumeiyoupin announced that it would adjust the ratio between ADS (American Depositary Shares) and Class A ordinary shares from 1 ADS on behalf of 1 Class A ordinary share to 1. ADS stands for 10 Class A ordinary shares, which became effective on January 10.
Two days after the effective date, that is, January 12, Jumei Youpin announced that it will be privatized again. Proposed privatization at a price of $ 20 per ADS. Once the transaction is completed, it will be delisted from the NYSE and Jumei Youpin will become a private company.
On the surface, the purchase price of Jumei Youpin’s privatization is higher than the previous one. In fact, Chen Ou’s price of $ 20 per ADS is equivalent to $ 2 per share before the joint venture, not only lower than The last privatization was $ 7, much lower than the 2014 IPO issue price of $ 22.
The reason for privatization given by Chen Ou this time is the same as last time, that is, the liquidity of small-cap stocks is relatively poor.Some shareholders have repeatedly proposed privatization proposals.
Actually, discerning investors have long questioned that the original intention of Chen Ou’s privatization was not a liquidity issue, but it was more likely that he saw the asset of Street Power and wanted to privatize it at a low price before listing.
It makes sense for investors to question. One of the clues is that Jumei Youpin has not announced financial results since the second half of 2018. The 2019 financial report has been pushed back and forth until now.
There are two consequences of not making a financial report:
First, institutional investors are no longer optimistic about the company and are selling. The stock price is lower.
Second, individual investors can’t see the data of Street Power, shake the investment position, sell, and the stock price is lower.
Different routes to the same goal. Failure to report earnings will lower stock prices.
Why is lower share price the most desirable situation for Chen Ou?
Because this means that he can directly privatize the high-quality asset of Street Electric at a low price, and then return to the Hong Kong Stock Exchange or the science and technology board to go public again.
The previous data has proven that Street Power is a high-growth quality asset. In the first half of 2018’s financial report, we can see that Street Electric had nearly 1 billion yuan in revenue in 2018.
According to data from Ai Media Consulting, 2019 should not be bad either.
The number of China’s shared power bank users is expected to exceed 300 million in 2019. In the first half of 2019, the share of China’s shared power bank users was ranked first in the industry with 40.5%, and the proportion of small power, monsters and calls They were 23.6%, 20.9%, and 11.7%, respectively.
Assuming that each person spends 15 yuan per year, this means that Street Electric’s revenue in 2019 will double year-on-year.
Can the second privatization succeed?
According to the latest data disclosed by Jumei Youpin, Chen Ou and its related parties hold a total of 42.9% of Jumei Youpin and have 88.3% of the company’s voting rights.
Compared to the 2016 privatization, the voting rights of the buyer group did not seem to have improved. In the last privatization, the buyer consortium of Jumei Youpin included Chen Ou, Dai Yusen, and Sequoia Capital, which collectively accounted for more than 90% of the voting rights.
So it’s bad to say whether this time can be successfully privatized.
Furthermore, companies that are listed on the US stock market after registering a company in Cayman or Bermuda must comply with several rules when privatizing:
First, voting rules for the privatization of Cayman or Bermuda-registered companies.
If a listed company is to be privatized through an agreement arrangement, in addition to the approval of 75% or more equity, and no more than 10% or more equity objection, it also needs to pass a mechanism commonly known as “several heads” to obtain More than half of the shareholders present agreed.
Second, the US Securities and Exchange Commission has two main conditions for the delisting of privatization: one is initiated by a controlling shareholder, and the other is that the acquisition of tradable shares requires fullThe department carried out in cash.
Based on the current market value of US $ 200 million for Jumei, Chen Ou needs to pay approximately US $ 118 million. In the offer letter, Chen Ou stated that the privatization will be financed by a combination of borrowing and equity financing, and the loans will be provided by third-party institutions.
It is unknown whether Jumei Youpin can meet the above conditions. Moreover, it is likely to face class actions by minority shareholders. After all, in the US capital market, due to the low purchase price of privatization, deliberate plagiarism and arbitrage have triggered widespread class action among shareholders.
As for Jumei Youpin, no matter if you are not doing business, or you are not in a good time, who would have thought that the first share of beauty e-commerce in that year will end with privatized street electricity.
The only thing that moves Jumei Youpin’s stock price is a joint stock.
On January 1, 2020, Jumeiyoupin announced that it would adjust the ratio between ADS (American Depositary Shares) and Class A ordinary shares from 1 ADS on behalf of 1 Class A ordinary share to 1. ADS stands for 10 Class A ordinary shares, which became effective on January 10.
Two days after the effective date, that is, January 12, Jumei Youpin announced that it will be privatized again. Proposed privatization at a price of $ 20 per ADS. Once the transaction is completed, it will be delisted from the NYSE and Jumei Youpin will become a private company.
On the surface, the purchase price of Jumei Youpin’s privatization is higher than the previous one. In fact, Chen Ou’s price of $ 20 per ADS is equivalent to $ 2 per share before the joint venture, not only lower than The last privatization was $ 7, much lower than the 2014 IPO issue price of $ 22.
The reason for privatization given by Chen Ou this time is the same as last time, that is, the liquidity of small-cap stocks is relatively poor.Some shareholders have repeatedly proposed privatization proposals.
Actually, discerning investors have long questioned that the original intention of Chen Ou’s privatization was not a liquidity issue, but it was more likely that he saw the asset of Street Power and wanted to privatize it at a low price before listing.
It makes sense for investors to question. One of the clues is that Jumei Youpin has not announced financial results since the second half of 2018. The 2019 financial report has been pushed back and forth until now.
There are two consequences of not making a financial report:
First, institutional investors are no longer optimistic about the company and are selling. The stock price is lower.
Second, individual investors can’t see the data of Street Power, shake the investment position, sell, and the stock price is lower.
Different routes to the same goal. Failure to report earnings will lower stock prices.
Why is lower share price the most desirable situation for Chen Ou?
Because this means that he can directly privatize the high-quality asset of Street Electric at a low price, and then return to the Hong Kong Stock Exchange or the science and technology board to go public again.
The previous data has proven that Street Power is a high-growth quality asset. In the first half of 2018’s financial report, we can see that Street Electric had nearly 1 billion yuan in revenue in 2018.
According to data from Ai Media Consulting, 2019 should not be bad either.
The number of China’s shared power bank users is expected to exceed 300 million in 2019. In the first half of 2019, the share of China’s shared power bank users was ranked first in the industry with 40.5%, and the proportion of small power, monsters and calls They were 23.6%, 20.9%, and 11.7%, respectively.
Assuming that each person spends 15 yuan per year, this means that Street Electric’s revenue in 2019 will double year-on-year.