According to sources that spoke with Reuters, a group of top executives at Razer Inc. plan on valuing the company at $4.5 billion once a deal is completed to take the company private. Chairman Min-Liang Tan and director Kaling Lim lead the group and plan on offering up to $0.51 per share in the company, according to sources, which is almost double the organization’s average stock price in November ($0.27).
The group of executives believes Razer has been undervalued in Hong Kong. In this part of the world, investors typically pay much more attention to companies from mainland China, they went on to say.
In a regulatory filing that came down on November 16th, Razer cited its board of directors, saying there is no certainty that these discussions will lead to a transaction. Additionally, the potential offering price for stock has not yet been determined.
The Profit‘s Take:
I thought it was interesting because the trend is taking esports companies public, so Razer is definitely going against the grain here. This could be a very positive sign for the business. They obviously believe their company is worth more than $4.5 billion if their plan is to go private and re-list in the United States. Clearly, the management team is bullish on its own product, which is something you love to see. Here’s my concern: Corsair Gaming has a market cap of over $2 billion. So, maybe Razer is a little too optimistic about itself at this current moment. Timing always plays a key part in these types of things. If it takes 12 months to go private, then I predict the hype will die down. Unfortunately, it’s impossible to know how the timeline of this whole thing will play out. Either way, Razer’s executives have a ton of confidence in their business, which is good because the hardware sector is a great industry to be in right now. Razer is in a pretty good place at this moment in time.
(All information was provided by Reuters)
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