In the last two days Dragonite stock has increased in value by 30% on volume of nearly 30% of the O/S shares. The company halted trading today (overnight) in Hong Kong and made an announcement. Here's a link to the announcement:
"As at the date of the announcement, the Managing Director of the Company, Mr. Gary Drew Douglas is in the United States to discuss with international tobacco companies for the possible disposal of or co-operation with or introduction of new capital into the Group's Ruyan electronic cigarettes business which owns the patents of electronic cigarette technology. No definitive agreements or contracts have been signed by the Group as at the date of this announcement and the aforesaid developments may or may not proceed. Shareholders of the Company and the investing public should exercise extreme caution when dealing in the shares of the Company."
So, it appears as if Dragonite is in serious talks to one of three things: 1) sell the business (and the patents) 2) find a international tobacco company to partner with 3) get an international tobacco partner or tobacco interests to invest in the business. Given the volume and price acceleration of the past two days this news has leaked in some fashion and this announcement was required.
Remember this would be the first announcement of this type ever initiated by the Company. An earlier release in 2011 about discussions with an international tobacco company in the past was made in response to rumors and the Company was directed to make the announcement by the Hong Kong Exchange. This release is proactive and neither defensive nor reactive.
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