The company was quiet for some time now but with new developments the stock is rallying once again.
On October 19, Kaixin Auto Holdings Inc. (KXIN) skyrocketed 257.5% following a gain of 1,270.3% over the past four consecutive trading sessions. And that too with a massive trading volume. At that time, the China-based auto-dealership company confirmed there was no news released to explain the recent volatility.
In an email to MarketWatch, Kaixin Auto Holdings stated that the spike in stock price came as a surprise to people in Kaixin.
After trading as high as $12.28 on Oct. 19, the stock plunged below $3 by Nov. 4.
However, the stock price is pushing back once again but this time the Chinese auto-dealer is rallying after the company announced today its Binding Term Sheet with Haitaoche Limited and changes in its top management.
The stock soared in the premarket market above 80% as it opened the day at $5.04 compared to the previous close of $2.77. Currently, KXIN shares have surged up to 33.21% to $3.69 as we write this at 2:02 P.M. EDT. The trading volume is also heavy almost around 41 million.
Term Sheet and Management Changes Sees KXIN Rallying
In a press release, the company announced that under the binding terms and conditions, Haitaoche will merge with a newly formed wholly-owned subsidiary of Kaixin.
Haitaoche will continue its business operations as the surviving entity and a wholly-owned subsidiary of Kaixin.
As per the binding agreement, Kaixin will issue a number of ordinary shares of KXIN to the shareholders of Haitaoche, allowing the Haitaoche Shareholders to collectively own 51% of Kaixin’s share capital upon closing of the Merger transaction.
A Chinese e-commerce firm, Haitaoche strives to become a leading automobile retail platform in China. The company is a big platform for imported automobiles and it plans to expand into electronic vehicles and other business areas.
The Merger will bring Haitaoche’s vehicle sales business to Kaixin as part of the agreement. In addition, after the completion of the Merger, the company will further contribute its other projects to Kaixin.
The company also made some changes to key positions in top management. The CEO and COO of the company, Chen Ji and Jinfeng Xie have resigned from their positions, respectively.
While the Board of Directors of Kaixin has appointed Mingjun Lin, the founder of Haitaoche, as the Company’s acting CEO with effect from Nov. 3, 2020.