Shares of JOYY (YY.US) are plunging 11% in premarket today. US-listed shares of Chinese tech company are slumping in premarket after the company announced a disappointing M&A development. Namely, JOYY informed that it has received a notice from Baidu on termination of the Share Purchase Agreement, dated November 16, 2020. Baidu was set to acquire YY Live, a domestic video-based entertainment live-streaming business, from JOYY for around $3.6 billion.
However, JOYY said that sale was substantially completed on February 8, 2021, and a notice from Baidu essentially cancels the transaction. Baidu claims that it had the right to do so and exercised it, while JOYY says it will seek legal advice on the matter and consider all options at its disposal.
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Create account Try a demo Download mobile app Download mobile appJOYY shares (YY.US) are currently priced at $35.17 in US premarket, scheduled for an over-11% drop at Wall Street cash session launch. Taking a look at the chart at D1 interval, we can see that the stock is set to open below the lower limit of the ongoing consolidation range. A break below this hurdle suggests a possibility of a deeper downward move, with a textbook range of the downside breakout from the range being $30.10.
Source: xStation5
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