NEW YORK (TheStreet) -- SINA (SINA) shares are up 22% to $49.70 in trading on Monday after the Chinese online media company announced that it entered into an agreement to sell 11 million of its common shares to CEO Charles Chao for $456 million in cash.
The per share purchase price of the deal is approximately $41.49, the company's average closing price for the previous 30 day period ending May 29.
Sina shares are currently trading at a 10 month high.
TheStreet Ratings team rates SINA CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate SINA CORP (SINA) 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 revenue growth, compelling growth in net income and reasonable valuation levels. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- SINA's revenue growth has slightly outpaced the industry average of 5.8%. Since the same quarter one year prior, revenues slightly increased by 7.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- Despite currently having a low debt-to-equity ratio of 0.40, it is higher than that of the industry average, inferring that management of debt levels may need to be evaluated further. Even though the debt-to-equity ratio shows mixed results, the company's quick ratio of 5.77 is very high and demonstrates very strong liquidity.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Internet Software & Services industry and the overall market, SINA CORP's return on equity is below that of both the industry average and the S&P 500.
- SINA has underperformed the S&P 500 Index, declining 8.10% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.
- You can view the full analysis from the report here: SINA Ratings Report