Shares of Ruhnn Holding (RUHN) were jumping 10.3% in morning trading Wednesday after the Chinese key opinion leader (KOL) facilitator for the fashion industry announced it was going private. Shareholders of Ruhnn's American depositary shares will receive $3.50 for each ADS owned.
Ruhnn went public on the Nasdaq exchange less than two years ago at a price of $11.50 per share, but never gained any traction and began declining in value almost immediately.
It closed just above $3 per share before this morning's announcement, meaning an IPO investor will lose 70% of their investment if and when this going private transaction closes.
Ruhnn claims to have 180 signed key opinion leaders, similar to social media influencers in the U.S., with an aggregate total of 295.3 million followers across major social media platforms in China.
But there are a lot of KOL facilitators trying to target the same markets, such as MOGU, which has similarly crashed and burned after its 2018 IPO.
Revenue for Ruhnn's fiscal second quarter ended Sept. 30, 2020, fell almost 8% as it achieved fewer product sales.
The KOL facilitator first announced its intention to consider going private on Nov. 25, 2020, at a price of $3.40 per ADS.