Under the terms of the agreement, China Digital TV will inject its CA, Network Broadcasting platform and VOD business into Shanghai Tongda Venture Capital, a company controlled by Cinda Investment. In exchange, China Digital TV will acquire a controlling stake in Tongda Venture and receive RMB1.15 billion in cash.
By midday, shares had added 15.6% to $4.37. Trading volume of 1.4 million shares was nearly five times its three-month daily average.
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Separately, TheStreet Ratings team rates CHINA DIGITALTV HLDG CO -ADS as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate CHINA DIGITALTV HLDG CO -ADS (STV) a HOLD. The primary factors that have impacted our rating are mixed -- some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its solid stock price performance, largely solid financial position with reasonable debt levels by most measures and attractive valuation levels. However, as a counter to these strengths, we find that the growth in the company's net income has been quite unimpressive."