The9 Limited (ADR)(NASDAQ:NCTY) was a massive mover during the trading session. The stock surged by close to 23% on the back of above average volumes. The stock has been in a strong uptrend and has outperformed the broader sector. The stock has been forming higher bottoms and higher bottoms indicative of buying interest at all dips. The moving averages have formed a “golden cross”, which is considered to be a bullish signal. The relative strength index continues to indicate that investors remain bullish. Traders believe the stock could head to levels of $5.12 in the near term and find support at $2.89
The9 Limited (ADR)(NASDAQ:NCTY) signed a definitive agreement with Splendid Days Limited regarding the sale of its senior secured convertible warrants and bonds. As per the reports, Splendid Days Limited is an investor and has agreed to subscribe The9’s 12% senior secured convertible bonds in an aggregate principal amount of $40.05 million.
Apart from this, Splendid Days has also decided to subscribe company’s warrants for an aggregate principal amount of $9.95 million.
Insights of The Matter
Reports claim that these notes are likely to be divided into three tranches; each of these tranches are fully convertible into ADSs of the company at a conversion price of $2.6, $5.2 and $7.8. These notes are likely to come with an interest rate of 12% yearly, payable at the time of redemption. The successful execution of this transaction is subject to customary closing condition.
The Investor is a subsidiary of Ark Pacific Special Opportunities Fund and carries a good reputation in the market when it comes to executing such transactions. Further details about this transaction will be made public from time to time by The9 Limited.
The9’s JV to Initiate Publishing and Operating Cross Fire 2 in China
Meanwhile The9 announced that its joint venture had received a license to publish and operate cross dire 2 in China. Reports claim that The9’s joint venture Oriental Shiny Star Limited has signed a license agreement with the renowned Korean Game Developer Smilegate Entertainment, Inc. The term of this license is five years, giving the company enough time to expand operations in China.
As part of this license agreement, Oriental Shiny Start Limited is likely to pay an initial payment of $50 million. The total payment of this agreement will come around $450 million based on certain operations and development milestones and royalty payments. The senior management team of the company is looking forward to the successful execution of this license agreement.