What: Shares of AirMedia Group (NASDAQ:AMCN) were up 43% as of 12:30 p.m. Friday after the company announced it has received a non-binding "going private" offer.
So what: AirMedia CEO Herman Man Guo and the company's management are proposing to acquire all outstanding shares they don't already own for $6.00 per American depositary share. This group of buyers already owns roughly 38% of AirMedia's issued and outstanding shares.
Now what: For perspective, that represents a premium of 70.5% over yesterday's close. At the same time, however, shares of AirMedia currently trade more than 50% below the stock's 52-week-high set just last month. Keeping in mind this is one of several similar "going private" offers from CEOs of listed Chinese companies in recent weeks, this morning's 40%+ pop, putting shares around $5, understandably reflects the market's doubts the deal will come to fruition. As a result, I think AirMedia investors would be wise to consider taking at least some of today's quick gains off the table.
Steve Symington owns shares of Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.