NEW YORK (TheStreet) -- Shares of 500.com (WBAI) were gaining 5.2% to $25 on heavy trading volume Tuesday after the Chinese online sports lottery service provider announced that Tsinghua Unigroup International took a stake in the company.
Tsinghua Unigroup will buy 63,500,500 newly-issued Class A ordinary shares of 500.com for about $123.8 million in cash.
Following the offering Tsinghua Unigroup will own 15.2% of 500.com.
"We want to welcome Tsinghua Unigroup as a shareholder to our company and to express our appreciation to Tsinghua Unigroup's confidence in our company," 500.com CEO Zhengming Pan said ina statement. "We believe the partnership between Unigroup and our company will be long term and mutually beneficial."
About 2.3 million shares of 500.com were traded by 10:28 a.m. Tuesday, above the company's average trading volume of about 1.9 million shares day.
TheStreet Ratings team rates 500.COM LTD -ADR as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate 500.COM LTD -ADR (WBAI) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself, deteriorating net income and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows: