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.