Last week, the NASDAQ halted trading on the shares of TOM Online, Inc. (NASDAQ:TOMO). That's always nerve-wracking for investors. However, in the case of TOM Online, it looked like the company was going private, which of course, is a good thing.
Today, we got confirmation. TOM GROUP will indeed buy out TOM Online for about $200 million. On the news, TOM Online's stock was up 26% to $14.64. While this sounds good, let's not forget that within the last year, the stock was as high as $28.89.
Tom Online has two joint ventures with eBay Inc. (NASDAQ:EBAY) and eBay's Skype but its main business is the Chinese wireless data market. While this has lots of potential, it is still in its early stages, at least in terms of monetization. This has certainly been a problem for TOM Online.
The recent fall-off in the Chinese equities markets was not helpful either.
TOM Group already owns about 65.73% of TOM Online already, making the probablity of another bidder quite slim. In other words, it holds all the cards. The complex Chinese regulations doesn't make it easy to buy companies there either.
Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.
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Reader Comments (Page 1 of 1)
3-14-2007 @ 5:30PM
Wool Street said...
I don't blame TOM for wanting to get out of Ebay's bed considering what's happened lately:
http://pheebay.com/forums/viewtopic.php?t=1192&start=0
3-12-2007 @ 5:16PM
firemeg said...
Chalk up another victory for eBay and CEO Meg Whitman! Not sure how the analysts are going to spin this one to make it look good. Maybe eBay can buy out some other fad internet site that is just about to reach (or recently reached) its prime and divert attention away from this. I can't wait for Meg's next "we're dedicated to China speech."
Also, refer to comment #1 (rolls eyes, shakes head).
http://firemeg.blogspot.com
3-14-2007 @ 10:50PM
firemeg said...
Vladuz was back! Twice in two days he hacked into eBay's servers.
TOM is smart.
http://firemeg.blogspot.com
4-30-2007 @ 9:18PM
brian keys said...
Great story. In order for eBay to expand they need to continue to grow in Asia. This is a huge market and they have to find a way to penetrate it. Yahoo has been more active and therefore more dominant. There is also a new competitor http://www.oltiby.com