On January 03, BlueCity Holdings Ltd. (BLCT) announced receipt of a preliminary non-binding proposal for the acquisition of the company. Consequently, the shares of the company surged up by 22.22% at the last check in the premarket.
During the previous market session, the stock traded in the green with a slight gain of 2.00%. After closing the session at $1.53, BLCT soared up to $1.87 premarket at the time of writing at 1.8 million shares.
The mobile application software developer and the online LGBTQ platform, BlueCity Holdings Ltd. has a market capitalization of $56.95M. Currently, the company has 26.99 million shares outstanding in the market.
Recent Developments
As per today’s announcement, BLCT’s board of directors received a preliminary non-binding proposal letter dated January 2, 2022. The letter was received from Mr. Baoli Ma (Chairman of the Board and CEO), and Sprivar Tech Limited. The buyer group sent the letter for the acquisition of all outstanding ordinary shares of the company. Moreover, these shares are also to include the Class A ordinary shares represented by the American Depository Shares of the company (not already beneficially owned by the buyer group). Furthermore, the proposed price of the transaction is US$3.70 per Ordinary share or US$1.85 per ADS in cash.
Furthermore, the buyer group’s intention is to fund the transaction essentially with equity capital in rollover capital and cash contributions.
Consequently, BLCT will form a special committee of the Board which will only consist of the independent and disinterested directors. While the committee will consider and review the proposal letter and proposed transaction, there is no guarantee of any truncation taking place.
BLCT’s Financial Analysis
On November 26, the company announced its unaudited financial results for the third quarter of 2021. Moreover, the third quarter of 2021 ended on September 30.
In the third quarter of 2021, BLCT generated total revenues of RMB270 million (US$41.9 million). This shows a 9.3% decrease year over year against the revenues in Q3 of 2020.
Moreover, the cost of revenues in the third quarter of 2021, decreased 8.3% year over year to RMB184.9 million (US$28.7 million).
Furthermore, the company incurred an adjusted non-GAAP net loss of RMB62.2 million (US$9.7 million) in the third quarter of 2021. This compares to the adjusted net income of RMB7.3 million in Q3 of 2020.
In addition, BLCT ended the third quarter of 2021, with cash, cash equivalents, and term deposits of RMB370.9 million (US$57.6 million).
