(Yicai Global) Nov. 25 -- Shares in Ruhnn Holding, a Chinese key opinion leader facilitator, gained 3.09 percent in pre-market trading on the news that its three founders might take it private.

Hangzhou-based Ruhnn’s stock price [NASDAQ:RUHN] rose to USD3.20 before markets opened. Yesterday, the shares shot up 16.23 percent to close at USD3.08. This is still far below its issue price of USD12.50 last April.

Founders Feng Min, Sun Lei and Chen Shao are proposing to buy all outstanding Class A shares for USD0.68 apiece and USD3.40 per American Depositary Share, the firm said today. The board has formed a special committee to evaluate the proposition, it added.

Ruhnn, which connects key opinion leaders on the internet with a huge e-commerce network, has been running at a deficit for years. Nurturing online talent involves huge investment and big internet celebrities do not come cheap.

In the third quarter Ruhnn’s net loss narrowed 38 percent from the same period last year to CNY31.2 million (USD4.7 million). Revenue has also slowed and was down 9 percent to CNY248.5 million (USD36.6 million).

However, the company remains confident about its future performance and expects revenue to reach between CNY520 million (USD79 million) and CNY610 million in the full fiscal year 2021, a gain of as much as double year on year, it said.

The number of fans was up 53 percent at the end of September to 295.3 million from a year earlier, Ruhnn said. The number of KOLs that have signed up increased to 180 from 146. The number of brands it serves jumped 68 percent to 1,423.

E-commerce giant Alibaba Group Holding bought a stake in Ruhnn in 2016. At the time, one of Ruhnn’s KOLs Zhang Dayi was said to be having an affair with one of Alibaba’s senior executives, Jiang Fan. Hangzhou-based Alibaba later said in an internal note that its investment in Ruhnn had nothing to do with Jiang, but that Ruhnn had not benefited from the rumors.

Editor: Kim Taylor