Giant Fires CFO, Offers Dividend to Placate Investors 巨人网络CFO辞职高额分红以安抚投资者

By newsdoug on August 9, 2011

Giant tries to win back investors with dividend There’s nothing like a big fat dividend to say you’re sorry, or at least that seems to be what online game operator Giant Interactive (NYSE: GA) is telling investors by becoming the latest US-listed Chinese firm to offer a dividend after coming under fire for some of its accounting practices. The company also announced the resignation of its CFO, again in an apparent attempt to mollify investors about one of its investments in an insurance business. But first the dividend. Just a week after real estate services firm Soufun (NYSE: SFUN) offered wary investors a 5 percent dividend (previous post), becoming the first major US-listed Chinese firm to offer such a dividend, Giant has come out with its own offering of a dividend of $3 a share, according to its latest results announcement. (company announcement) That translates to a yield of a whopping 40 percent, one of the highest rates I’ve seen in recent years, based on Giant’s latest closing price. At the same time, the company also announced the resignation of its CFO, who is being replaced by another person whose credentials include a stint at global accounting firm PricewaterhouseCoopers. (company announcement) Reading between the lines seems relatively simple here: Giant’s chairman used the company as his personal investment vehicle to buy an insurance company, a move that no doubt was approved by a CFO who was eager to please his boss even though insurance was completely unrelated to Giant’s core gaming business. When investors found out, they protested by selling off Giant shares, which tumbled 30 percent in the last 3 months. To win investors back, Giant is offering this generous dividend and has fired its CFO as a scapegoat. This is exactly the kind of shenanigan that has led to a broader confidence crisis over the accounting practices of US-listed Chinese companies. If I were an investor, I would certainly consider buying Giant for the short term simply for the dividend. But longer term, I’d still be quite wary of this and many other US-listed Chinese companies.

Bottom line: Giant Interactive’s awarding of a generous dividend and firing of its CFO is an attempt to mollify investors over accounting concerns, which will continue to weigh on the company’s stock.

要想表达歉意，没什麽能比提供一份丰厚的分红更好的了——至少近来因会计事宜而遭遇批评的网络游戏公司巨人网络是想通过这种方式来与投资者沟通。巨人网络还宣布首席财务官(CFO)辞职，很明显这也是就一笔保险生意的投资来安抚投资者。就在一个星期前，搜房网(SFUN.N: 行情)决定给投资者5%的分红，这是第一家这麽做的在美国市场上市的中国公司，而巨人网络则紧随其後，提供每股3美元的分红，这意味将40%的利润用来分红，这是近年来我看到的分红力度最大的一次。同时，巨人网络还宣布了新的CFO上任，此人曾经在普华永道工作。解读这一系列事件，其中隐含的意思其实很简单：巨人的董事长将这家公司作为其个人投资工具，购买了一家保险公司，而CFO为了讨好自己的老板，就毫不犹豫地批准了，没有顾及到保险业务是与巨人的核心游戏业务完全无关的。投资者发现後，通过抛售巨人股票以示抗议，巨人股票在过去三个月就大跌30%。为了安抚投资者，巨人提出分红并解雇CFO。但实际上这会让人们对巨人的财务状况产生更大的信任危机。如果我是投资者，我肯定会短期内买巨人的股票，来获得分红，但从较长期投资角度而言，我会对巨人公司和其他在美国上市的中国公司持警惕态度。

一句话：巨人网络公司提供丰厚分红，解聘其CFO，是为了安抚投资者对会计问题的担心。

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