Sohu will get $30/share from Sogou and Changyou is worth even more

Posted on by John Sheehy

Sohu will receive $1,179mm in cash ($30/SOHU) from Tencent's privatization of Sogou, their jointly controlled search and AI business (LINK). Sohu's Changyou gaming business could easily demonstrate value of $57/SOHU through a 2021 listing in Hong Kong or China. Sohu's media business (news and video) continues to lose money and along with corporate overhead may … Continue reading Sohu will get $30/share from Sogou and Changyou is worth even more

Changyou Will Deliver Strong Results For Sohu In 2020

Posted on by John Sheehy

Sohu offered $10/ADS to buy out the 33% public stake in its Changyou gaming business Release of a new mobile game from its hit TLBB series could boost Changyou's 2020 earnings to $150mm (about $3/ADS) Sohu should report a substantial 2020 profit after 8 years of losses.  Changyou will be strong, Sogou will continue to … Continue reading Changyou Will Deliver Strong Results For Sohu In 2020

Phoenix New Media: Special Dividend, Strong Asset Value, Strong Brand, Weak Profitability

Posted on by John Sheehy

Phoenix New Media (6/6 closing price = $3.45) is selling a majority of its strategic investment in Yidian Zixun for estimated net cash proceeds of US$409mm ($5.62/ADS). The company expects to pay a special dividend of 15-25% of proceeds ($0.84-$1.40/ADS) The company will retain net cash + ST/LT investments after the dividend of $552-$593mm ($7.56-8.12/ADS) … Continue reading Phoenix New Media: Special Dividend, Strong Asset Value, Strong Brand, Weak Profitability

Sohu 20-F Reveals $144mm Tax Benefit

Posted on by John Sheehy

Sohu's 20-F revealed that the company no longer believes it will owe any special one-time tax in connection with the 2017 US Tax Reform.  If correct then this will free up $144mm of cash (about $3.69/ADS) for general corporate purposes. Investors in Changyou and Sohu are frustrated by the lack of information about the status … Continue reading Sohu 20-F Reveals $144mm Tax Benefit

What’s next after the Changyou dividend and Sohu liquidation?

Posted on by John Sheehy

Changyou's recently distributed special dividend and Sohu's pending liquidation may be intended to facilitate a new buyout offer for Changyou.  Fair value for a transaction should be at least $29.74/ADS. Some additional background was in my prior articles: Changyou’s Buyout Price Should be Raised to at least $53  Sohu Valuation enhanced by successful Sogou IPO and … Continue reading What’s next after the Changyou dividend and Sohu liquidation?

Sohu Valuation enhanced by successful Sogou IPO and potential Changyou privatization

Posted on by John Sheehy

Successful IPO of the Sogou search business clarifies the $1.5Bn value of Sohu's retained 33% stake ($39/share of SOHU) Possible privatization of the Changyou gaming business would deliver $1.4Bn of net cash before tax ($35/share of SOHU) at the unfair preliminary offer price or $1.8-3.2Bn ($45-$82/Share of SOHU) at fair value Sohu has minimal debt, … Continue reading Sohu Valuation enhanced by successful Sogou IPO and potential Changyou privatization

Changyou’s Buyout Price Should be Raised to at least $53

Posted on by John Sheehy

2/1/18 Update: Liquid Assets (cash+investments+loan) at 12/31/17 were $1127mm or $21.06/ADS.   Chairman Charles Zhang offered to acquire all outstanding shares of Changyou at a price of $42.10/ADS The offered price is significantly below the average valuations of competing companies (27.7 P/E for US/HK listed and 36.9 P/E for China listed) The offered price does not … Continue reading Changyou’s Buyout Price Should be Raised to at least $53