Rakuten, Inc., Japan's largest online retailer plans to sell its stake in Chinese travel company, Ctrip.com International Ltd. Rakuten currently owns 20.3 percent of Ctrip, at a value of US$575 million.
Seiji Kasashita, Rakuten's spokesperson, said that Rakuten intended to use Ctrip to enter the Chinese market, but that it had now decided to sell its shares.
After Rakuten announced it would dump Ctrip's shares, Ctrip saw its share price close at US$40.61 in Nasdaq Stock Market on August 8, down 6.17 percent from US$43.28 on August 6. Ctrip's second quarter fiscal report shows its profit margin dropping significantly, grossing just US$2 million from its tourism product sales last quarter.
Fan Min, Ctrip's CEO told China Business News that his company respected Rakuten's decision and this would not affect Ctrip's business. He said the fluctuation of the share price was normal and was not automatically connected to Rakuten. However, he did not specify whether Ctrip would buy up Rakuten's shares.
For more details, please read the full article in Chinese. (http://www.china-cbn.com/s/n/000004/20070810/020000052635.shtml)
(China.org.cn August 10 2007)
