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Giant shares tumble on chairman's stock sale

NEW YORK (AP) -- Shares of Giant Interactive fell Thursday after the Chinese online game developer said its chairman planned to sell 11 million of its U.S. shares at a discount in an underwritten public offering.

THE SPARK: An affiliate of Chairman Yuzhu Shi plans to sell the American depositary shares for $7.25 each. The price represents a 4 percent discount to the company's Wednesday closing stock price of $7.55.

The offering's underwriters also have been granted a 30-day option to buy up to an additional 1.7 million shares. Giant will not receive any of the proceeds from the offering.

THE BIG PICTURE: Shi served as the Shanghai-based company's CEO until stepping down in April of this year. He was replaced by Wei Liu, the company's president.

THE SHARES: Down 49 cents, or 6.5 percent, to $7.06 in afternoon trading, after dropping as low as $7 earlier in the session. Over the past 52 weeks, the company's shares have traded between $4.20 and $8.64.