It looks in retrospect that RenRen (RENN) was the top of the "chinese internet/ social media" bubble, at least this time around. [May 2, 2011: RenRen IPO Appetite Seen as Huge, but Red Flags Abound] [Apr 19, 2011: RenRen Set to IPO May 4th] That broken IPO has been a disaster, as we warned. (IPO Priced at $14, first day mark at $24!) At this pace it may actually go low enough where I'd be interested!
With lots of scandals - frauds (purported or real) in Chinese stocks of late the discount on any Chinese stock has grown. But today is an especially frightful day as in a relatively quiet day in markets, the Chinese stocks - many IPOs of the past 6-7 months - are being taken to the cleaners.
RENN - 13%
YOKU -10%
SINA -9%
QIHU -8.5%
HMIN -8% (not an internet stock)
amongst others...
I mentioned about 2 months ago I was no longer backing Sina (SINA) at that valuation and price, after banging the drum in late 2010. It also may soon be approaching a level that makes it interesting once more. But obviously on a technical level it is broken badly.
Much like the silver trade - once the momo lemmings leave a trade, you just have to get out of dodge! When a sub sector is in a fervor there is no valuation people will pay. But when the momentum reverses, old school metrics sort of matter again.
No positions
Wednesday, June 8, 2011
Chinese Internets Getting Crushed
Posted by
Mark
at
2:49 PM
Chinese Internets Getting Crushed
2011-06-08T14:49:00-04:00
Mark
RenRen|
Sina|
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Chinese Internets Getting Crushed
2011-06-08T14:49:00-04:00
Mark
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