Acorn Soars for Second Day After Dividend Announcement
Shares of Acorn International Inc. (NYSE: ATV) continued their run up in midday trading today as the Shanghai-based marketing and branding company soared an additional 30 percent to $37.25 per share.
The company, which announced Friday that it would issue a one-time cash dividend of $14.97 per American depositary share, saw its shares climb that day by more than 16 percent. Acorn, which develops, promotes, and sells self-branded and third-party products, said its shareholders as of June 4 would receive the cash dividend on or about June 22.
"Our shareholders have repeatedly pointed out the opportunity to unlock value on our balance sheet, create liquidity, and return cash to shareholders," the president and chief executive officer of Acorn, Jacob Fisch, said in making the announcement.
"Following the recent sale of our wholly-owned Hong Kong subsidiary Bright Rainbow Investments Ltd. and underlying non-core assets, our board has approved this return of capital to our shareholders," he added.
Each ADS represents 20 ordinary shares. The total amount of the dividend to be paid is approximately $40 million based on 53,437,890 outstanding ordinary shares, which is approximately 2.7 million ADSs.
For the first quarter, Acorn reported it had $18.7 million in cash and equivalents. In April, the company received over $50 million from selling its Hong Kong subsidiary, Bright Rainbow Investments Ltd., together with Shanghai HJX Digital Technology Co. Ltd., which owned a plot of land in Shanghai measuring nearly 19 acres. Acorn retained a 37.5 percent stake in a joint venture, titled "HJX Transaction," established with the purchaser.