Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Bona Film Group were dazzling investors today, popping as much as 10% after the investment firm Fosun Group took an equity stake in the company.
So what: Bona, the Chinese film distributor, said that Fosun, a large-scale investment group, will acquire 2,000,000 shares, or the equivalent of 6.4%, of the company at a price of $5.20 per American depositary share. Fosun, which has a market cap near $40 billion, will purchase the shares from Matrix Partners and some of Bona's pre-IPO shareholders, including Bona CEO Dong Yu, who praised the deal, saying, "We believe this investment will create meaningful synergies between the two parties."
Now what: The move seems to be a step in the right direction for Bona, which operates 20 movie theaters in China and produces a wide range of films. Like many industries in China, the company figures to grow alongside the country's burgeoning middle class. China's richest man, Wang Jianlin, recently plunked down $8.3 billion to build the Qingdao Oriental Movie Metropolis, a strong indicator for the industry's growth. With movements like that afoot, Bona could have a bright future.
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The article Why Bona Film Group Shares Jumped originally appeared on Fool.com.Fool contributor Jeremy Bowman has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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