Subaye Releases Shareholder Letter
Posted on: Monday, 9 November 2009, 11:48 CST
I am writing to you today to clarify the facts surrounding Subaye, Inc.'s (the "Company") decision to acquire the remaining approximate 31% of our subsidiary, Subaye.com, Inc (the "Minority Interest"). The following details provide a concise summary of why the Company and its Board of Directors felt an acquisition of the Minority Interest was in the best interests of the Company and its shareholders:
1. The Company believed a great deal of uncertainty surrounded the future of the Company and the Minority Interest as a result of the fact that the Company did not have full control over the Minority Interest and certain significant decisions that would impact the Company's business operations in the future could have been blocked or delayed in various ways by the individuals who controlled the Minority Interest. This transaction resolves that uncertainty and allows the Company to operate its most promising business segment without the uncertainty of future business decisions being blocked or delayed by the individuals who controlled the Minority Interest. 2. The Company believed the value of the Minority Interest and its net assets had been increasing at a substantial growth rate as compared to the Company's other business segments and their respective net assets. If the Company was to acquire the Minority Interest, the Company believed the current consideration needed in order to complete the acquisition of the Minority Interest would be substantially lower than it would be should the acquisition have been completed in the future as opposed to November 6, 2009. 3. The Company's stock price and trading volume as quoted on the United States Over-the-Counter Bulletin Board reached recent highs and was generally very strong in the past few months. The Company believed it had a window of opportunity to work with the individuals controlling the Minority Interest in order to consummate an acquisition during a time when the Company's stock price and trading volume were stronger than in recent history. 4. The Company was heavily indebted to its subsidiary, Subaye.com, Inc., as well as the subsidiaries of Subaye.com, Inc. when the acquisition of the Minority Interest was completed. As a result of the acquisition, the Company will be able to cancel those debts, which were in excess of $6 million. 5. The Company has been and will be spending significant amounts of its resources, including cash, in order to promote the Company's brand names, namely "Subaye," and its products and services. The individuals controlling the Minority Interest do not operate the Company or any of its subsidiaries but have been benefiting from this spending and would have continued to benefit from this spending as long as the Minority Interest existed. The Company felt this scenario had to change and that the Company and its shareholders should benefit fully from its advertising, other spending efforts and ultimately from the increase in value of the Company's net assets.Each of the individuals comprising the Company's management are significant shareholders of the Company and receive a majority of their compensation in the form of the Company's common stock. The members of management and also the largest shareholder of the Company had their ownership interests significantly diluted along with the other shareholders of the Company in order to complete this transaction. We hope that our shareholders view this transaction favorably given the facts as they are presented above and with the knowledge that those individuals who control this Company, whether they be management, members of the Board of Directors or significant shareholders, have all committed to this acquisition and believe it to be in the best interests of the Company and its shareholders. This Company is poised for significant growth in the coming years. We hope you will be with us to enjoy that growth and reap the potential rewards of that growth by investing in Subaye.
With regards, Zhiguang Cai, Chief Executive OfficerThis letter may contain certain "forward-looking statements" that are based on the Company's current expectations, assumptions, estimates and projections about its business and industry. Various words, including, but not limited to, "may," "expects," "plans," "anticipates," "intends," "will or would," and similar expressions (modified as may be required by the context) are intended to identify "forward-looking statements." There can be no assurance that any of such statements will accurately predict future events, and actual results are subject to various risks and uncertainties that could cause the Company's actual results to differ significantly and materially from those reflected in any forward-looking statements.
Safe Harbor Statement under the U. S. Private Securities Litigation Reform Act of 1995:
This release contains forward-looking statements which express the current
beliefs and expectations of Subaye, Inc.'s management. Such statements are
subject to a number of known and unknown risks and uncertainties that could
cause Subaye, Inc.'s future results, performance or achievements to differ
significantly from the results, performance or achievements expressed or
implied by such forward-looking statements. Other important factors that may
cause actual results to differ materially from the forward-looking statements
are discussed in the "Risk Factors" section and other sections of Subaye,
Inc.'s Form 10-K for the year ended
About Subaye, Inc.
Subaye, Inc. ("Subaye" or the "Company") is a leading provider of video
sharing services in
For further information on Subaye, Inc., please visit
http://www.subaye.com/english or http://www.subaye-ir.com , the new investor
relations site which should be operational on
Forward-Looking Statements
Certain statements contained herein constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These forward-looking statements are based on current expectations,
estimates and projections about Subaye, Inc.'s industry, management's beliefs
and certain assumptions made by management. Readers are cautioned that any
such forward-looking statements are not guarantees of future performance and
are subject to certain risks, uncertainties and assumptions that are difficult
to predict. Because such statements involve risks and uncertainties, the
actual results and performance of the Company may differ materially from the
results expressed or implied by such forward-looking statements. Given these
uncertainties, readers are cautioned not to place undue reliance on such
forward-looking statements. Subaye, Inc.'s operations are conducted in
SOURCE Subaye, Inc.
Source: PR Newswire
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