2013 (Sep) Temasek + DCM in US$60M Series D funding
2014 Listed on Nasdaq (9 Ma 2014)
2014 Listed on Nasdaq (9 Ma 2014)
With the kind of easy money flowing into ecommerce wannabes, one wonders if the dotcom bubble lesson has been learnt at all. It is perfectly fine for entrepreneurs to try to chase their dreams, but for investors managing tax payers' money, a higher level of risk aversion is always better jn retrospect. A certain most powerful woman in the world has expressed in somewhat unlady-like fashion that 'it needs balls' in these kind of wheeling and dealing. The abashed silent majority may feel that it actually needs brains.
Tuniu is a Johnny come lately in the Online Travel Agency business in China. It had to contend with fierce competition from established OTA platforms like Ctrip, eLong, Tongcheng and Qunar. It started out in the leisure tourism sector by focusing on group tours and other packaged deals. In May 2014, it listed in US with an issue price of $9/share, peaking at $24.99/share, after which it dived and has been an under-performer. It is in danger of being delisted as its price has slipped below $1.
Six longs years after listing, it is still burning cash. OTA is a business with high $ deals, low repeat deals, and very low margins. After the US listing, Tuniu unwisely spent lavishly on a promotional drive using well known celebrities. That extravagance hurt 2016 financials badly. To build profitabilty it slashed expenses, closing overseas offices, shrinking HQ and divesting some technology units. In 2018/2019 it opened up more than 500 physical stores to build customer base in a return to good old brick-and-mortar model. The balance sheet is still workable, but the management and the direction of the company is in turmoil.
Temasek's investment and divestment:
Six longs years after listing, it is still burning cash. OTA is a business with high $ deals, low repeat deals, and very low margins. After the US listing, Tuniu unwisely spent lavishly on a promotional drive using well known celebrities. That extravagance hurt 2016 financials badly. To build profitabilty it slashed expenses, closing overseas offices, shrinking HQ and divesting some technology units. In 2018/2019 it opened up more than 500 physical stores to build customer base in a return to good old brick-and-mortar model. The balance sheet is still workable, but the management and the direction of the company is in turmoil.
Temasek's investment and divestment:
Date |
Shares |
High |
US$ |
Low |
US$ |
|
Sep 2013 |
18,142,893 |
50,000,000 |
50,000,000 |
Series D funding converted at IPO | ||
2014 Q4 |
2,690,440 |
US$19,79 |
53,343,807 |
US$11.88 |
31,962,427 |
Bought |
22 May 2015 |
3,750,000 |
US$20.33 |
76,237,500 |
US$20.33 |
76,237,500 |
Bought |
2019 Q4 |
-4,847,682 |
US$7.00 |
-33,933,774 |
US$4.49 |
-21,766,092 |
Sold |
2020 Q1 |
-2,150,941 |
US$2.60 |
-5,592,446 |
US$0.87 |
-1,871,318 |
Sold |
2 Apr 2020 |
-17,584,710 |
US$1.01 |
-17,760,557 |
US$1.01 |
-17,760,557 |
Sold |
The realised loss from this investment is estimated at between US$100.9M to US$138.2M.
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