What: Shares of AirMedia Group (AMCN) were down 17.4% as of 11:15 a.m. Monday after the company announced it has entered into a definitive agreement to sell a roughly 75% equity interest in its advertising business to Beijing Longde Wenchuang Fund Management for RMB2.1 billion, or roughly $338 million based on current foreign exchange rates. 

So what: That implies a total valuation of RMB2.8 billion following AirMedia's impending business restructuring, through which -- to borrow the words of AirMedia CEO Herman Guo when the company announced quarterly results last month -- they "endeavor to transform into a leading in-flight and on-train Wi-Fi operator in China."

For perspective, this new deal also requires terminating a deal AirMedia announced in conjunction with last month's report to sell a 5% equity interest in its advertising business for RMB150 million (or around $24.2 million in cash) to Shenzhen Liantronics, which placed a higher value on the ad business of roughly RMB3.0 billion.

Now what: Guo explained, "We believe the terms of the Transaction with Longde Wenchuang are preferable compared with the terms we received or discussed with other potential buyers as we will receive the consideration all in cash, in a much faster and predictable manner."

What's more, Guo noted, the new agreement doesn't require approval of government regulators, and will give the company the "opportunity to continue to capitalize on the sale of the remaining 25% equity interest at an even more favorable valuation if and when Longde Wenchuang sells the equity interest it purchased to other companies or list AM Advertising on China's stock exchanges or New Third Board in the future."

Of course, that's little solace to investors today who were counting on the higher valuation indicated by the previous -- albeit smaller -- deal. As it stands, given the variables and risks involved as AirMedia continues to divest its ad business in favor of a yet-to-be-proven transformation to a new market, I'm still content watching AirMedia from the sidelines.