Jumei investors demand higher share buyback price

"We had been quite optimistic about Jumei's growth potential," Liang Jian, CEO of iMeigu, told China Daily on Monday.

"My clients, friends and I have spent a lot on buying its shares. But now the go-private offer simply wipes out our money."

According to Liang, the $7 offer is too low, considering the company's historical prices.

Jumei's shares traded at an average price of $20.64 during the period between its IPO and the date when the privatization plan was announced, he said.

"Jumei must either stop the go-private plan or raise the buyback price.

"We will take every legal measures to safeguard our interests," Liang said, adding the company is discussing with lawyers and investment banks on whether to file a lawsuit and what an appropriate price should be.

Jumei's proposal is the latest example of Chinese companies rushing to exit the US stock market where they believe they have been undervalued.

An analyst at Tiger Brokerage Group, which provides Internet brokerage business for US and Hong Kong stocks, said if a law suit is filed against Jumei, it will definitely postpone the privatization process.

"What's worse, the whole go-private efforts may fall apart and its stock price crash.

"Even if Jumei wins in the end, the time costs will be very high," said the analyst, who asked not to be identified.