One of the largest problem is that the core business of the company is in trouble. Revenues from wireless value-added services (WVAS) fell 77.9% from last year or 24.4% from last quarter. The acquisition of Ku6, an advertising revenue generating company, was unable to make up for the loss on its core business.
Cash at hand were $52.6 million, enough to sustain operations for another half a year. Under this circumstances Shanda's (NASDAQ:SNDA) cash injection of $36.9 million in exchange for 415 million newly issued shares gives the company a lifeline till the end of the year. But if that gives the comp[any enough lifeline to turn around their business is an open question.