MakeMyTrip Limited (NASDAQ:MMYT) shares are up over 33% this morning after the company announced that they have reached an agreement with Ctrip.com International (NASDAQ:CTRP) in which Ctrip will invest $180 million via convertible bonds. The agreement, which also provides Ctrip with the right to acquire MakeMyTrip Limited (NASDAQ:MMYT) shares on the open market, will allow the travel service provider to continue growing their business within the Indian travel market.
Undoubtedly this is a tremendous move for MakeMyTrip as they need to continue to ward off possible competition. Investors have showed a very positive response to this news, with trading volume reaching over 4 times the 3 month average for shares of MakeMyTrip Limited (NASDAQ:MMYT).
“We are delighted to have Ctrip invest in us. Ctrip is the dominant market leader in the online travel market in China,” explained Deep Kalra, Founder and Group CEO, MakeMyTrip. “We believe there are many similarities in the Indian and Chinese online travel markets and we expect this strategic relationship between two market leaders to be mutually beneficial.”
The stock is up 33.10% or $5.43 following the news, hitting $21.85 per share. About 552,063 shares traded hands or up 255.26% from the average. MMYT has declined 15.75% since June 3, 2015 and is currently downtrending. It has underperformed the S&P500 by 9.90%.
From a total of 2 analysts covering MakeMyTrip (NASDAQ:MMYT) stock, 1 rate it a “Buy”, 0 a “Sell”, and 1 a “Hold”. This means that 50% of the ratings are positive. The highest target price is $17 while the lowest target price is $16.20. The mean of all analyst targets is $16.60 which is -24.03% below today’s ($21.85) stock price. MakeMyTrip was the topic of 3 analyst reports since August 12, 2015 according to the firm StockzIntelligence Inc. Deutsche Bank downgraded shares on October 30 to a “Hold” rating.
MakeMyTrip Limited is an online travel firm in India. The company has a market cap of $708.39 million. The Firm conducts its business principally through its Indian subsidiary, MakeMyTrip Private Limited (MMT India). It currently has negative earnings. Through its primary Website, www.makemytrip.com, or MakeMyTrip.com, its subsidiaries’ websites, such as www.hoteltravel.com, www.makemytrip.ae, www.makemytrip.com.sg, and other technology-enhanced distribution channels in India, including its call centers, travel stores and travel agents’ network, travelers can research, plan and book a wide range of travel services and products in India, as well as overseas.