What: Shares of Chinese e-commerce company E-Commerce China Dangdang (DANG) surged on Thursday after the company's chairwoman and CEO submitted a non-binding going-private proposal at a 20% premium to Wednesday's close. The stock was up as much as 12% at market open, but by 11:45 a.m., it had settled down to a 3.7% gain.

So what: Going-private offers have been all the rage recently for U.S.-listed Chinese companies, as the previously soaring Chinese stock market offered an opportunity to relist in China at a potentially higher valuation. The recent rout of Chinese stocks, however, throws this strategy into question. Nonetheless, Dangdang is the latest company to receive such an offer.

Chairwoman Peggy Yu Yu and CEO Guoqing Li, who together hold 35.9% of all outstanding shares and 83.5% of the voting power, have offered $7.812 in cash per American depositary share, which each represents five common shares of Dangdang's stock. The board of directors will form a special committee of independent and disinterested directors in order to evaluate the proposal.

Now what: With the stock still well below the offer price, investors don't seem optimistic that the deal will go through. Up until the middle of June, the Chinese stock market was soaring, and these going-private deals made sense. But over the past month, the Shanghai Composite index has declined more than 30%, and it's unclear how much farther Chinese stocks will fall. The market clearly doesn't believe that this deal will actually happen.