Jefferies says China Teams launch ‘big deal’ for Microsoft, ‘not so much’ VNET

Noting that VNET Group (VNET) shares were up by more than 20%, Jefferies analyst Edison Lee suggested two possible reasons: the fact that Microsoft Teams was launched in China on April 1 and VNET is the exclusive partner of Microsoft (MSFT) and that possibility that Ares Capital has either stopped selling or sold their entire stake in VNET. On the former, the firm says the launch of Microsoft Teams in China is "a big deal" for Microsoft, but "not so much for VNET," adding that the move is "likely an over-reaction" if attributable to that as Teams has plenty of competition in China. On the latter, the firm says it "cannot ascertain," but notes that Ares owns only about 8M ADSs versus a total trading volume of about 90M ADSs since February 14. The firm, which says it still views VNET as "too cheap to ignore," has a Buy rating and $8.20 price target on the shares.