Jumei.Com Is Accused Of Invaded The Interests Of Minority Shareholders.

Due to dissatisfaction with jumei.com's low privatization, jumei.com (JMEI) small shareholders' collective rights protection incidents were raging, and more focused on the management represented by Chairman and founder Chen ou.

In February 24, 2016, an analyst who did not want to be named said in an interview with reporters that according to the issuing price of IPO, the funds raised and the performance since listing, jumei.com's low privatization is a naked invasion of the interests of minority shareholders.

According to public data, if privatization is successful, the interests of minority shareholders will be encroached on as high as 300 million US dollars.

Insiders say that all kinds of factors have led to a fall in share prices. Large shareholders will take advantage of the low price privatization and will eventually encroach on the interests of small and medium-sized shareholders who have taken out real gold and silver, involving an amount of up to US $300 million.

At present, the small shareholders who have no right to speak have started the activism in the United States and Cayman, while the US rating agency TheStreet Ratings has also lowered jumei.com's rating to the D level "sell" level.

Wang Fengjuan, a professor of Business School of Beijing Technology and Business University and an expert on the accounting qualification evaluation center of the Ministry of finance, said that jumei.com's decision to make low price privatization by using short term stock price falls is a kind of irresponsibility for small and medium shareholders. Even if it returns to A shares in the future, it will still be able to make irresponsible behavior to small and medium shareholders.

In February 18th, jumei.com announced the receipt of a privatization application from the company CEO Chen European and Sequoia Capital, which was prepared to privatize the price of $7 per ADS depository.

Chen said in an open letter that the value of jumei.com has been seriously underestimated.

Chen, on the one hand, said jumei.com's value was undervalued, and on the one hand, it repurchased at a price far below the issue price of 1/3.

As soon as this news came out, it immediately caused dissatisfaction among the small and medium-sized shareholders. "The price of privatization is too low" has become the focus of various media competing to report for a while.

The reason why the small and medium shareholders think the price is too low is that the price of the company's repurchase is 3 months' average and the premium is 15% to 30%, while the average closing price of the 3 month closing is 7.85 dollars, the purchase price is only 7 dollars, less than the initial issue price 1/3, so the value created is -69%.

In addition, during the ten month period of privatization inviting from IPO May 16, 2014 to February 16, 2016, there were only 21 trading days in less than 7 US dollars in 572 trading days, that is, 97% trading periods were higher than the privatization price.

Wang Fengjuan believes that short-term stock price volatility can not be a reason for its privatization, because the stock price volatility is a normal phenomenon in the market, and it is a short-term stock price fall under the global stock market crash. With the future performance and market stability, the stock price will rise again.

So they use short term.

The decision to make a low price repurchase is actually irresponsible for small and medium-sized shareholders.

Jumei.com's small and medium shareholders' advocacy group advocates Mr. Fang told reporters that at present, the United States has prepared materials for litigation with lawyers. It is expected that the prosecution time will be within one to two months, and the complaint has been filed with the securities and Exchange Commission of the United States (SEC).

In the case of Cayman's prosecution, small shareholders of rights protection are also studying the legal environment and direction of prosecution, which is later than that of the United States.

It should be decided according to the progress of the US litigation and the investigation of SEC. If SEC starts the investigation, it is unnecessary to prosecute.

According to Mr. Zhang, at present, more than 150 small and medium-sized shareholders have taken part in the rights protection. There are more than 70 authorized co operation persons. The small and medium-sized shareholders of the rights protection group add up to 2 million ~250 shares. The proportion of circulating shares is about 2%~3%, and more small and medium shareholders are expected to join.

As of the evening of February 24th, jumei.com rights group has 240 members, most of them are small and medium-sized shareholders, including three domestic investment companies such as I, US stock and so on.

He said that in the United States and Cayman, the contents of the litigation were different. The main litigation content in the United States was misleading investors, on the grounds that Chen called on investors to give him more time. He told investors in the three quarter of 2015 that he would return to profitability in the fourth quarter.

In December 15, 2014, jumei.com released a $100 million share buyback plan, saying it would buy up to $100 million in 12 months.

At that time, Chen Ou said that the stock repurchase program reflected the company's management's confidence in jumei.com's development prospects and operation basis.

It is for this reason that many investors believe Chen ou, but the $100 million buyback plan has not been implemented, and investors haven't received the news of the low price privatization after the fourth quarter earnings announcement.

"At present, more than 50 small and medium-sized shareholders have applied to the SEC for investigation. With the increase of the number of people, even if no investigation is launched, they will have a great influence in the United States.

Even if SEC and prosecution can not get through, small and medium shareholders will finally prevent them from listing on A shares and expose Chen Ou's behavior of undermining commercial spirit and value investment. "

Mr. Zhang said.

In response to the problem of underestimation of prices, small shareholders' rights protection and misleading investors, jumei.com stakeholders said in a written reply to our reporter that privatization price is up to 27% on the basis of ten day average price, which is fully in line with the relevant provisions of SEC.

At present, there is no information about formal rights protection, and there is no misleading stock price or any behavior that does not conform to the SEC regulations.

Small shareholders told our reporter that the reasons leading to the decline of jumei.com's shares were mainly in three aspects: one was the end of 2014, because jumei.com distributed false and misleading statements and information to public investors, which was caused by US law firms' investigation and collective litigation. The second was the first loss since jumei.com appeared in the three quarter of 2015, and third was the overall downturn and the environment.

Public information shows that in November 19, 2014, investors who bought jumei.com depository receipts (ADS) launched a class action lawsuit against jumei.com in the Eastern District Court of New York.

The reason is that jumei.com failed to disclose the adjustment of the revenue mode from the sale of third party platforms to the direct selling of businesses. Secondly, the change of this mode brought great risks to jumei.com's successful financial performance. The last point is that jumei.com did not expand the third party platform marketing services as promised.

Data show that in December 11, 2014, the price of jumei.com American Depositary Receipts dropped to a low level of $12.87, but in August 18, 2014, it rose to a high level of $39.45.

In addition, jumei.com made its first loss in the third quarter of last year, and the net loss to the company's common shareholders in the third quarter was 86 million 900 thousand yuan (about 13 million 670 thousand dollars). The net profit attributable to the common shareholders of the company was 120 million yuan in the same period last year.

In the third quarter, the marketing cost was RMB 197 million 900 thousand yuan, an increase of 101.1% over the 98 million 400 thousand yuan in the same period last year.

The growth is mainly aimed at expanding user groups and enhancing the awareness of brand awareness in the United States.

Jumei.com said that the decline in gross profit margin in the third quarter was mainly due to the gradual pformation from the third party platform cosmetics sales business to the self operated business in September 2014 and the inventory optimization activities of the fast moving duty-free shops in the United States.

Although the third quarter profit margin has dropped, part of the cost is one-off and will return to profitability in the fourth quarter.

However, it is unexpected that no big shareholder has decided to make a low price privatization soon after jumei.com's stock price fell.

Mo Daiqing, director of the online retail department of the China Electronic Commerce Research Center, said in an interview with our reporter that jumei.com's pformation is facing numerous competitors.

stay

In the field, from Ali, Jingdong, vip.com, Amazon China, suning.com, Gome online and so on, the problem of "squeezing effect" is very serious for the small and medium vertical electric providers. In the field of cross-border electric business, there are direct competition between foreign terminals, honey buds, Beibei network and NetEase koala shopping. In the beauty field, the power of daily network and Mickey net can not be overlooked, all of which are a challenge to jumei.com.

The research report released by TheStreet Ratings shows that the pfer of jumei.com to the D class "sell" level is determined by some outstanding problems, such as its earnings per share, its deteriorating net income, its bad gross margin and its serious bad performance in the stock market. The existence of these problems will make it difficult for investors to get better returns from this stock.

The long listed company data analyst said that the specific appropriation amount was calculated based on public data:

When jumei.com IPO issued 13.4% new shares at $22, it raised $430 million from investors.

However, the funds raised during the ten months of a year did not suffer any loss.

On the contrary, from June 2014 to September 2015, all the profits except 2015 3Q were realized. The net profit (after tax) of 2014 2Q-4Q was 19 million 180 thousand US dollars, 19 million 500 thousand US dollars and 10 million 730 thousand US dollars respectively, and the net profit of 2015 1Q-3Q was 16 million 350 thousand US dollars, 17 million 820 thousand US dollars and -1370 million US dollars respectively.

The total net profit during the above period is $69 million 880 thousand.

According to the proportion of 13.4% new shares issued by IPO, the net profit of these minority shareholders who have paid real gold and silver should be 6988 x 13.4%=936.39 million.

It is understood that the United States did not pay dividends during the listing period, nor did it have private placement.

The total amount of capital raised by US $430 million plus the net profit of small and medium shareholders should be $9 million 363 thousand and 900. The interests of minority shareholders in jumei.com's 13.4% share the sum of 439 million dollars.

According to the prospectus, jumei.com IPO issued 11 million 140 thousand shares of American Depositary Shares (ADS), underwriters had an excess allotment rights of 1 million 671 thousand ADS, and the 6818182A level common stock was issued to IPO General Atlantic, a Singapore Fund Company.

The total issued share capital is about 19 million 629 thousand and 200 shares.

According to the US $7 /ADS, the cost of privatization of large shareholders is about $137 million.

Then, do not consider others.

The difference of repurchase benefits takes into account the discrepancy between the purchase price and the repurchase price at IPO. With the interests of minority shareholders minus 439 million dollars, the cost of large shareholders privatization will cost 137 million US dollars. Once privatization is successful, the interests of large shareholders will be as high as 302 million US dollars.

This does not include the estimation of off balance sheet assets, which is the value of jumei.com's massive user assets since its establishment.

In February 25th, I Stock Exchange said it suspected that Chen Ouxian CEO, a polyamerican company, manipulated its share price and issued a privatization invitation.

The reason is that poly US earnings in 2015 predicted that Q3 might not be profitable, and stock prices began to plummet.

The reason for the loss of Q3 is that SKUs, such as sunscreen and food, has been on sale, and this decision is a controllable behavior of Chen and other management.

Insiders said that at present, Chen Ou + Yu Yu sun + Sequoia has a total stock of 54.4%, and the buyer's consortium's voting power is as high as 90%, which can be forced to buy back.

Small shareholders have no say in privatization.

Therefore, safeguarding rights is particularly important.

Wang Fengjuan believes that large shareholders can not easily encroach on the interests of minority shareholders through "one go ahead and one retreat" (one entry is a listing, one retreat is to withdraw from the market), which is unfair to minority shareholders.

This event is a test of major shareholders' responsibility for small and medium-sized shareholders. Even if they return to A shares, they may be irresponsible to minority shareholders in the future.

At present, large shareholders do not intend to make efforts for the long-term interests of small and medium-sized shareholders. Repurchase is only beneficial to the large shareholders themselves.