What will NetQin do in the face of a privatization offer?

Recently, NetQin announced that it has received a non-binding privatization offer from Bison Capital Holdings. Although NetQin's board of directors is currently evaluating Bison Capital Holdings' proposal, it is not difficult to find that NetQin is unlikely to accept Bison Capital Holdings' privatization.

First, Bison Capital Holdings proposed a fixed cash compensation of $9.8 per ADS, but the stock price of NetQin, which experienced a surge and decline again due to the news, still remained above $7. Judging from the current stock price of NetQin, even if it is attacked by the short-selling institution Muddy Waters again, it can still hold up until the release of the annual report in November 2014.

Secondly, if NetQin successfully submits its annual report before November, its stock price will surely rebound significantly. By then, even the smallest increase will surely exceed $9. At this time, NetQin has no need to choose to complete privatization at a price of $9.8.

From the perspective of Bison Capital Holdings, in May this year, NetQin sold 5.88% of its wholly-owned subsidiary Feiliu to Bison Mobile and other investors under Bison Capital Holdings for a total price of approximately US$25 million. This transaction raised Feiliu's valuation to US$425 million. It can be said that Bison Capital Holdings has acquired NetQin's most valuable asset. Faced with NetQin's stock price being unable to recover due to the continuous short selling by Muddy Waters, Bison Capital Holdings' privatization of NetQin will only increase its investment risk.

Meanwhile, after NetQin raised its business forecast for the first quarter of 2014 and its revenue for the second quarter, it also received recognition from the capital market. Topeka Capital Markets released a research report reaffirming its "buy" rating for NetQin's stock and its target share price of $33. Therefore, NetQin has no reason to privatize at a price of $9.

After being shorted by Muddy Waters last year, NetQin disclosed its deposit accounts, showing a balance of nearly $280 million, and transferred $166 million of convertible bond proceeds from ZTE to Standard Chartered Bank to prove liquidity. For NetQin, which has four major business directions: mobile games, mobile advertising, mobile security, and enterprise mobility, what it lacks is investor confidence and ample time to prove its position.

NetQin said that the board of directors is currently evaluating the proposal of Bison Capital Holdings and may hire an independent advisory team, including an independent financial advisor, to assist the company in its evaluation. However, the board of directors of NetQin has not yet made any decision on the proposal of Bison Capital Holdings, including the timing of the transaction.

If NetQin finally accepts the privatization offer from Bison Capital Holdings, it only means that NetQin is tired of the tactics of certain institutions in the US capital market, and will not pay for the communication costs with people who do not understand NetQin and the mobile networking model.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.