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Sogou News: Why SOGO Stock Is Skyrocketing 49% Today

Tencent wants to acquire Sogou

Sogou (NYSE:SOGO) is in the news Monday after announcing an offering from Tencent (OTCMKTS:TCEHY) to acquire the Chinese internet search company.

Sogou (SOGO) search engine under magnifying glass
Source: Gil C/Shutterstock.com

According to a Sogou news release, Tencent wants to acquire all outstanding shares of SOGO stock. This has it offering $9 per share for SOGO stock. That offer represents a 56.5% premium over the stock’s closing price on Friday. It’s also an 84.9% premium over the stock’s volume-weighted average price from the last 320 days.

Sogou notes that if the deal were accepted, it would have the company becoming a “privately-held, indirect wholly-owned subsidiary of Tencent.” This would also result in SOGO stock being delisted from the New York Stock Exchange.

Sogou points out that it has yet to make any decision regarding the offer from Tencent. The company is expecting a special committee made up of independent members of its Board will consider the offer.

As is the case with these types of offers, Sogoue says that there no guarantee that it will accept Tencent’s proposition. Even so, Tencent already has a significant amount of influence in the company.

Tencent currently owns 39.2% of outstanding SOGO shares and controls 52.3% of the voting power at the company. It’s also entered into an agreement with Charles Zhang to support the deal. Zhang owns 6.4% of SOGO shares and has almost 1% of the voting power at the company.

SOGO stock was up 48.7% as of Monday afternoon and is up 21.6% since the start of the year.

As of this writing, William White did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2020/07/sogou-news-sends-sogo-stock-soaring/.

©2020 InvestorPlace Media, LLC