Wednesday, October 14, 2009

Temporarily Selling E-House Holdings (EJ) Pending Spinoff IPO

Since I am using a virtual portfolio and I am not sure how it will handle a potentially complicated transaction I am going to temporarily sell E-House Holdings (EJ) pending the spinoff / IPO of China Real Estate Information (CRIC) [Sep 30, 2009: China Real Estate Information Seeks US IPO Worth $200M]
  • Now, real-estate broker E-House Holdings (NYSE:EJ - News), is preparing to sell off part of its information and consulting business this week. But the deal is a little different because it's doing a merger at the same time.
  • Last year, the firm formed a joint venture with Sina Corp. (NasdaqGS:SINA - News), one of China's leading Internet portals. In July of this year, Sina agreed to sell its real estate division to E-House, which is combining it with the spun-off data business. The IPO, then, will consummate the merger.
Doing all the stuff for the blog I have not had time to look to see how this deal works mechanically, but it sounds similar to what (SOHU) and (CYOU) did earlier this year. So just to keep it simple I am going to sell today and buy back hopefully Friday or next Monday after the IPO. This is actually one of our largest positions at the time ... we'll be out in the $22.10s.

The IPO should price in the next 72 hours.

No position

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