Wecast Network Inc (NASDAQ:WCST) On A Bull Run

Wecast Network Inc. (NASDAQ:WCST), the Video On Demand (“VOD”) service provider, incorporated in the State of Nevada on October 19, 2004, recently announced massive amount of changes in the company in an endeavor to create a turnaround in the share price. In less than two months, the CFO and the CTO were changed, some new members were added to the Board and the company acquired several businesses. The new changes worked out and shareholders obtained 160% return in a very short period of time. Have a look:SourceThe big question here is: will the uptrend continue? We will let you know our opinion in this piece.Business logicWecast Network sells premium content and solutions for the delivery of video on demand to cable providers, Internet Protocol Television ("IPTV") , mobile operators, various content distributors as well as direct viewers in the Republic of China. The company commenced providing these services after the acquisition of You On Demand Hong Kong on July 30, 2010. According to the annual report, this business entity owns a subsidiary called YOD WFOE, which is the owner of 80% of Zhong Hai Media, which is the company providing the cited services.In our opinion, the most interesting assets of WCST are the agreements with the IPTV and mobile distributors, manufacturers and operators. The investors with expertise in the Chinese business will know some of its partners; most of them are public companies:

• China Network Television and Future TV Co. Ltd.
• Huawei
• Dr. Peng Telecom and Media Group, Ltd
• Southern Media Corporation - China's biggest and world’s third biggest Cantonese television network

Recent DevelopmentsAs mentioned earlier, the company seems to be in a process of a reorganization and internal restructuring. First of all, on November 11, 2016, the company changed its name from YOU On Demand Holdings, Inc. to Wecast Network, Inc. Then, on January 30, 2017, WCST acquired Sun Video Group Hong Kong Limited, a Hong Kong corporation. The price paid was not small for a company that has a market cap of $170 million:

"An aggregate purchase price of $800,000 and a $50 million Promissory Note (the “SVG Note”) with the principal and interest thereon convertible into shares of the Company’s common stock at a conversion rate of $1.50 per share. BT has guaranteed that SVG will achieve certain financial goals within 12 months of the closing."

This is not all; WCST seems to be on fire. On February 2, 2017, the market got to know another transaction. Wecast acquired 55% of Wide Angle Group Limited from the same seller of Sun Video Group Hong Kong Limited. Additionally, the company announced that it was ready to launch a virtual commerce solution in Q2 2017. To sum up, in less than two months, the revenue line increased dramatically, as the company will add the revenues of the new companies and the new products launched. It is this dramatic growth that pushed up the share price.Additionally, at the same time, the company is in the process of restructuring the business. Several business executives were changed in the following months. Investors know that when you change the head in an organization, the whole organization makes a move. This is what is happening at the moment. On February 2, 2017, WCST announced that Mr. Yi Xu will be the new CEO. Furthermore, on March 23, 2017, the company appointed a new CFO, Mr. Simon Wang, and a new CTO, Mr. Randy Huang. Finally, on April 20, 2017, WCST announced the appointment of Mr. Sean Wang to the Company's Board of Directors.Solid Balance SheetThe company shows a large amount of assets as compared to the liabilities in the balance sheet as of December 31, 2016. In total, the net tangible assets are approximately $28 million. Additionally, the long term debt is very small, approximately $0.9 million and the company had $2.5 in cash standing in the balance sheet. We need to see how the new acquisitions change the current financial situation, but we believe that the situation will remain stable, and investors will appreciate the new EBITDA that the company will be able to show to the investment professionals.Institutional stockholdersThis is a company operating a business in China. American investors generally believe that Chinese accountants use "creative accounting" techniques. In this case, we believe that traders will appreciate that some big funds own shares of WCST. Have a look:HolderSharesDate Reported% OutValueFIL LTD731,872Dec 30, 20161.71%900,202Vanguard Group, Inc. (The)350,761Dec 30, 20160.82%431,436BlackRock Fund Advisors35,609Dec 30, 20160.08%43,799Goldman Sachs Group, Inc.33,274Dec 30, 20160.08%40,927Salzhauer, Michael25,000Dec 30, 20160.06%30,750Geode Capital Management, LLC15,827Dec 30, 20160.04%19,467KCG Holdings, Inc.14,297Dec 30, 20160.03%17,585UBS Group AG6,413Dec 30, 20160.02%7,887Bank of America Corporation6,335Dec 30, 20160.01%7,792Blackrock Investment Management LLC2,860Dec 30, 20160.01%3,517SourceConclusionWecast Network is growing at a high pace thanks to acquisitions, and it is, at the same time, restructuring its business. The business plan seems quite ambitious and traders have celebrated it pushing up the share price. In our opinion, many investors did not notice the acquisitions and may buy more shares upon the next earnings release, when the new revenue growth gets factored in. In addition, we believe that the company shows a solid balance sheet that will sustain the growth. Finally, we checked that institutional ownership is quite strong for a Chinese enterprise. Even thou their holdings are quite small, the fact that they are dipping their toe in the water is a sign that they have the potential to vastly add to their positions. To sum up, try to check the company from time to time as there is a lot in WCST and we believe that more is coming. We will be updating our subscribers as soon as we know more. For the latest updates on WCST, sign up below!Disclosure: We have no position in WCST and have not been compensated for this article.