Why Did a Chinese Peroxide Company Pay $1B for a Talking Cat?

Re:Why Did a Chinese Peroxide Company Pay $1B for a Talking ... by hackunomatter on Tuesday May 23, 2017 @06:18PM (#14405875)

Sounds like pump-and-dump to me. From what I could gather (albeit I'm not very familiar with financial engineering): the Chinese stock market is hot, and P/E of 100 is not uncommon. In other words: P = 100 x E.

Suppose you are a company that sells some conventional goods whose market is tapped out, so no more growth in the "E". You find a game company (who doesn't understand the games market, especially China, where smartphones are like second appendages?) with earnings of, say, X. If you can buy this outfit for something significantly lower than 100 * X, then (using the equation above), you'll be able to boost your own company's "P" by 100 * X by acquiring the company, at a cost much lower than 100 * X.

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Re:Why Did a Chinese Peroxide Company Pay $1B for a Talking ... by mljoe on Wednesday May 24, 2017 @02:43PM (#14412397)

It seems super sketchy. I mean the valuations based on current P/E aren't even terrible except for the fact that gaming especially doesn't seem an enduring business. That E is probably going to go down as people move on to other games.

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