Wednesday, December 8, 2010

Two Super Hyped Chinese IPO's Out Today - (YOKU) & E-Commerce Dang Dang (DANG)

It's 1999 all over again, except now the companies coming IPO that deal with the internets (sic) are Chinese.

A quick look at's (YOKU) finances for the first 9 months of the year

$35M in revenue
$25M in losses

but but but... the investment bankers say its the Youtube of China - buy buy buy, stock IPOs at $12.80 and trades at $35 as I speak. 

  • The video company saw a 135% increase in its revenue to 234.6 million yuan, or about $35.3 million, in the first nine months of 2010 from one year earlier, but its net loss widened by 22.5% to 167 million yuan, or $25.1 million, in the same period. 

There is another Chinese IPO filed called Tudou Holdings (TODU) that is also a video sharing site... and I am sure it will also be marketed as the Youtube of China!  Can't wait for that one ;)  Yee haw, 1999 redux.  But only Youku means "excellent and cool" in Chinese (Mandarin?)

For those of you in the financial analysis field, the original $12.80 valued YOKU at 15x sales... so at the current price we are paying 45 sales.  Happily.  (for the non financial types, 3x sales is pretty typical, and "high prices acquisitions" in the tech field generally will go at 6-7x sales)  Bernanke has more free money headed our way... buy buy buy.


As for our other big winner E-Commerce Dang Dang (DANG) - wait for it.... it's the " of China".  Thank you investment bankers for making these so simple a 1st grader can momentum chase these stocks.

They sell books on the internet - literally what does did.... 12 years ago.  I guess the Kindle, and Nook are not coming to China anytime soon.

Dang Dang actually makes money, so the original IPO $12 IPO price was giving a 48x PE ratio per Bloomberg.  Of course it was hyped, so it priced at $16... and has immediately shot up to $30ish now that is it trading.  Don't ask about the PE ratio there, just buy - because what Greenspan was to flooding the world with money pre Y2k, Bernanke is to the 100th degree today.  We are in a risk less central bank backed market.  I am sure it will work out better this time around (see 2000-2002)

Mmmm.... Kool Aid.

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