Why DouYu Stock Popped While Huya Stock Dropped Today
Shares of DouYu (NASDAQ: DOYU) popped Monday, trading 9.3% higher as of 1:10 p.m. EDT, while shares of Huya (NYSE: HUYA) had dropped by 12.5% after Huya announced it would acquire rival DouYu. Chinese tech giant Tencent (OTC: TCEHY), which owns stakes in both live-streaming companies, has been pushing for a combination.
Huya is offering 0.73 American Depository Shares (ADS) for each DouYu ADS in an all-stock deal. Based on Friday's closing prices, the transaction values DouYu shares at approximately $18.83, or about a 35% premium to where they finished last week.
The boards of both Huya and DouYu have approved the deal, but DouYu shareholders representing at least two-thirds of voting power will still need to approve the merger. DouYu co-CEOs Shaojie Chen and Wenming Zhang, who have 54.6% combined voting power, have committed to voting in favor of the deal.
Source Fool.com
