The encyclopedia · Strategy & Leadership · Strategic decision · 2015–2020
Baofeng's stock rose 43x in a month — then a €520M sports bet removed the founder
A video-player company peaked at ¥37 billion on speculation, bought a sports-rights firm whose founders walked out, and couldn't pay its server bill.
Baofeng Group · MP & Silva · 2016-05
What happened
Baofeng Technology, maker of the Baofeng Yingyin video player, listed on Shenzhen's ChiNext board on 24 March 2015 at an IPO price of 7.14 yuan per share. In the speculation frenzy that followed, the stock hit 28 consecutive one-character limit-up moves, then 11 more. It peaked at 327 yuan — 43 times the IPO price — giving a video-player company a market capitalisation of 36.9 billion yuan.
At that peak, founder Feng Xin announced a pivot to sports media. On 25 May 2016, a consortium led by Baofeng and financed by Everbright Securities and China Merchants Bank acquired 65 percent of MP & Silva, a UK-registered sports-rights broadcasting company, for approximately 520 million euros. Baofeng renamed itself Baofeng Group and announced a sports division.
The acquisition collapsed almost immediately. MP & Silva's three Italian founders left after the deal, taking key executives with them; they were not bound by effective non-compete clauses. The company then lost its core broadcasting rights in successive rebids: Serie A international rights went to IMG, Ligue 1 to BeIN. In 2018, the UK High Court ordered MP & Silva into bankruptcy. The 520-million-euro investment was effectively lost.
By 28 July 2019, Feng Xin had left the company; senior management resigned shortly after. By November 2019 the company's website and app went offline because it could not pay its server-hosting fees. Net assets were negative 240 million yuan. Baofeng was delisted from the Shenzhen Stock Exchange on 10 November 2020.
Why it happened
- The 43x stock rise was pure ChiNext speculation; it gave Baofeng a ¥37 billion paper valuation unrelated to its video-player revenue, and management spent the paper wealth as if it were real
- The acquisition was financed through a partnership with Everbright and CMB — Baofeng committed other people's capital to a bet it lacked the expertise to evaluate
- The three Italian founders were the entire value of MP & Silva — their relationships with rights holders — and the deal contained no effective mechanism to retain them after the acquisition closed
- When the rights were lost in rebid, there was no residual asset: MP & Silva owned no content, no infrastructure, no audience — only contracts that expired and were not renewed
The lesson
A stock price is not a war chest. Baofeng's ¥37 billion was speculation, not earnings. The acquired asset was three men's phone books — and the deal let them walk.
Aftermath
Feng Xin left the company in 2019. Everbright Securities and China Merchants Bank sued to recover their capital. Baofeng's shares transferred to the Old Third Board (400115). The case became a standard Chinese-market example of ChiNext-era speculation meeting an acquisition with no substance behind it.
Sources
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