Why Vipshop Holdings Shares Skyrocketed Today

Shares of Vipshop Holdings (NYSE: VIPS) have skyrocketed today, up by 42% as of 12 p.m. EST, after scoring a huge vote of confidence from Chinese tech giants Tencent (NASDAQOTH: TCEHY) and JD.com (NASDAQ: JD). The two companies announced they will invest $863 million combined in the online discount retailer.

Both larger companies will be purchasing Class A ordinary shares at a price of $65.40 per share, which translates into $13.08 per American depositary share of Vipshop. Five American depositary shares, which are what trade in the U.S., represent one Class A ordinary share. That purchase price represents a 55% premium over Friday's close.

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Source: Fool.com