Why GigaCloud Technology Stock Fell 27.8% This Week
Shares of GigaCloud Technology (NASDAQ: GCT) are down 27.8% this week as of Thursday's close, according to data provided by S&P Global Market Intelligence, as the market jeered the business-to-business (B2B) marketplace platform's move to acquire a seemingly disparate company called Noble House Home Furnishings.
Shares of GigaCloud plunged around 25% on Tuesday alone after the company issued a press release announcing it has entered into a definitive agreement as a so-called "stalking horse" bidder to acquire substantially all the assets of Noble House for $85 million in cash. The deal was made in connection with Noble House's ongoing Chapter 11 bankruptcy proceedings.
A stalking-horse bidder (in this case GigaCloud) is one that strikes an initial deal with a bankrupt company (Noble House) to acquire some or all of its distressed assets. Such deals are typically arranged to create a reserve in advance of a bankruptcy auction for those assets.
Source Fool.com
