Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Chinese insurer CNinsure
So what: The buyout offer -- from a pair of investment firms, one of which is run by Hu -- values the company at roughly $19 per share and represents a 44% premium to its Friday closing price. The consortium already owns 34% of CNinsure's outstanding shares, but with the stock having shed about 50% of its value over the past seven months, Hu is finally taking matters into his own hands.
Now what: I'd be cautious about jumping in at this point. While 16% of upside remains between the current price and the buyout offer, it also means that Mr. Market is still a tad skeptical of the deal actually getting done. When you couple the huge downside that exists if things fall through with CNinsure's questionable long-term investment appeal, passing on the stock seems like an easy decision.
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