Uxin Ltd. Ltd. (Nasdaq: UXIN) soared nearly 10% to $1.35 per American depositary share by midday Tuesday on the news that it is selling its B2B operations to China’s largest marketplace for classifieds, 58.com Inc. (NYSE: WUBA)
The Beijing-based online used car dealer said in a statement today that it will sell its entire B2B business for $105 million to an affiliate of 58.com. Under the agreement, Uxin said it will not “engage” or obtain a used car B2B business without consent from 58.com.
With the company now shifting its focus on its 2C operations, Uxin watched its 2B revenue plunge in the third quarter to $10.1 million, down 63% year-over-year. While its 2C operations surged 247% year-over-year to $46.3 million.
“As we expanded into the retail market, we have gradually shifted our strategic focus to the 2C business. By entering into this transaction, we will be able to devote all our attention and resources towards developing our 2C online transaction business and strengthen the one-stop online buying experience for consumers,” Kun Dai, the founder, chairman, and chief executive officer of Uxin, said in a statement today.
He added, "We are confident in our future business prospects and will use our strengthened cash position to generate long-term sustainable growth.”
Today’s announcement follows Uxin’s move to divest its loan facilitation business to the FinTech platform Golden Pacer in July due to the challenging financial sector in China. Under the agreement, Uxin said it would receive $100 million and “certain preferred shares” which represents around 18% of the capital stock in Golden Pacer.
Uxin will now look to navigate around the fears of the coronavirus and improve its position in the stock market. On Monday, Uxin fell to an all-time low of $1.21 per share. The company has been publicly traded since June 2018, when it raised $400 million in its IPO.
In the three months through September Uxin’s revenue reached $65.2 million, up 33% year-over-year. Net loss narrowed to $37.8 million, or 4 cents per share, compared with $86.6 million, or 9 cents per share in the same period of the preceding year.
Uxin expects the deal with 58.com to close in the first half. By intraday, the stock in 58.com rose 4% to $49.11 per share.