The Inspiration For China Concepts Stock By Dell's Going Private

Going private is a common form of volunteering delisting in the US capital market,and also a very important system that make the whole market stay vibrant.The US(in particular,Delaware)has established a mature and relatively perfect system of going private by the regulation of security law and corporate law.Dell's going private in this context it is a typical case.The Dell's case refered in this paper means the case after the closing of Dell's going private.The whole course of Dell's going private lasts more than 1 year,which means the course didn't go that well.When this deal closed,parts of the minority shareholders were not satisfied with the purchasing price,and initiated a lawsuit against Dell,asking for appraisal rights.Particularly,as a derivative case of Dell's going private,Dell's appraisal rights case has been heard by two tiers of court i.e.Delaware Chancery Court and Delaware supreme court.Both of them treat Dell's case as a positive characteristic,though the supreme court revered this case at last.In this case,the board,the special committee,the financial advisor,the lawyer and the founding father,Micheal Dell,they all acted skilled and specialized.And they found a balance point of all related parties by their speciality.And also,their performance presented us some important principles and rules in the US corporate law(in particular,Delaware corporate law),which is worth studying.During the study of Dell's case,we are fully aware of fiduciary duty inprivatization process.Fiduciary duty has become a core principle during the whole course of going private.For others principle we know,for example the Revlon duty,during the going private,they may all treated as the derivative rules of fiduciary duty.The essence of Dell's case is to judge whether all the relevant parties has fulfill their fiduciary duty.Since we know fiduciary duty is a subjective rule,we can only confirm this ruled has been performed by some indirect facts,so the comparison of purchasing price and fair value become necessary.One thing we need to know is,when judging a fair value of stock,the court tend to use DCF model to calculate the fair value of stock.And usually,the court tend to compromise the view of both parties.On the other side,China Concepts Stock faced a tough situation since 2010,because since that year,the China Concepts Stock has been collectively short,so delisting of China Concepts Stock has become more common.Because of its VIE structure,many of and China Concepts Stocks choose to go private without self-discipline,which caused some negative opinions by the investors.We could explain this for two reasons: the Cayman problem and no strict self-discipline.One thing we should notice is that the China Concepts Stock,which acted as a whole,may not acted without self-discipline by utilizing its VIE structure any more.Some of China Concepts Stock members had been breakers because of their non-standard and irrational delisting behavior,which has damaged the reputation of the whole.In recent years,we surprised to find that the Cayman court had become more strict about delisting problems by using some the US court's point of view in the similar cases for reference,typically the Dell's case was nominated as an important reference.That means,the China Concepts Stock may not avoid responsibility by their special VIE structure.We hold this view because we conclude that the Cayman court tend to establish a judicial system of appraisal rights after studying the recent cases in Cayman,particularly the case of Shanda Games.In result,the China Concepts Stock need to find their problem,at least they can be inspired by the present positive characteristic,this is the starting point and the goal of this paper.