Every morning from 8-9 a.m. ET, Benzinga’s PreMarket Prep airs. Traders and investors listen in during that fast-paced, very informative hour to get the important news of the day, the triggers behind those moves, and the accompanying price action for the future session.
On any given day, co-hosts Joel Elconin and Dennis Dick, as well as producer Spencer Israel, will cover at least 20 stocks.
On Tuesday, there was a lot of price movement in Chinese firms that are traded on US exchanges, both up and down. Weibo Corp (NASDAQ: WB), the PreMarket Prep Stock of the Day, was rising up and was discussed extensively on the PreMarket Prep show.
The Company: Weibo is China’s most popular social media network. Weibo had 521 million monthly active users and 225 million daily active users as of 2020, with many of them attracted by the millions of major opinion leaders in entertainment, sports, and business. With 44.7 percent of shares and 70.8 percent voting power, Sina is the largest stakeholder; Alibaba has 29.8 percent of shares and 15.7 percent voting power.
Before the market opened, Reuters reported that the business’s chairman, Charles Chao, and a state investor were in talks to take the Chinese company private in a deal worth at least $20 billion, or $90-$100 million. In addition, Alibaba Group Holding Ltd (NYSE: BABA), a key shareholder, would be able to sell its stock under the terms of the agreement.
Chao’s holding company, New Wave, is the largest shareholder in Weibo, and he was said to be attempting the purchase with a Shanghai-based state firm.
The Suspension of Disbelief: When the matter was originally brought up on the show, both hosts were skeptical that the sale would go through for a variety of reasons.
The isse’s sharp rise from Friday’s close ($54.31) to a premarket high of $81.55 provided an opportunity for investors to “ring the register.”
It was trading at $75 when the issue was first raised on Tuesday’s broadcast.
The following video goes from 15:23 to 19:25:
More Information: While our guest was being questioned later in the episode, Bloomberg reported on the company’s response to the claim.
The report is false, according to Chao, who also stated that he has had no discussions with anyone about the company’s privatization.
After the story was debunked by the corporation, PreMarket Prep returned to report the price action.
During the Regular Session, Price Movement: The frenzied selling that followed the denial of the rumor spilled over into the regular session as well. The issue experienced a brief recovery to $62.76 after opening below $60 and then maintained its downward trend.
As of 12:30 p.m. EST, it has continued to make session lows, with the newest one being $57.50. It would have to fall to $54.42 to fill the vacuum left by Friday’s session and reach the top of the range.
At last check on Tuesday, the stock was up 6.63 percent to $57.91.
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