China Internet Stocks Smell Like Death (RENN) (YOKU) (DANG)
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China Internet stocks have been under significant pressure the past month or so and today the carnage continues.
Look around the once "red hot" sector and the devastation is easy to see: Renren (NYSE: RENN) down 67% from its high, Youku.com Inc (NYSE: YOKU) down 60%, China Dangdang (NYSE: DANG) down 70%. In fact, Renren and Dangdang have broken well below their IPO syndicate price.
While the above names were part of the recent "the Chinese _____ (insert Facbook, Amazon, YouTube here)” IPO craze, even leaders in the sector are under pressure: Baidu, Inc. (Nasdaq: BIDU) is down 24% from its highs and Sina Corp. (Nasdaq: SINA) is down 40% from its highs.
The recent action in the sector has been related to fears about accounting in China. Those fears were stoked today after the SEC said it is seeking stop orders for China Intelligent Lighting and Electronics Inc. (AMEX: CIL) and China Century Dragon Media Inc. (AMEX: CDM) after the companies' independent auditor resigned and withdrew its audit opinions on the financial statements included in the companies' registration statements.
While it could be argued they are late to the game, it appears the SEC's crackdown on China stocks is just getting starting.
Look around the once "red hot" sector and the devastation is easy to see: Renren (NYSE: RENN) down 67% from its high, Youku.com Inc (NYSE: YOKU) down 60%, China Dangdang (NYSE: DANG) down 70%. In fact, Renren and Dangdang have broken well below their IPO syndicate price.
While the above names were part of the recent "the Chinese _____ (insert Facbook, Amazon, YouTube here)” IPO craze, even leaders in the sector are under pressure: Baidu, Inc. (Nasdaq: BIDU) is down 24% from its highs and Sina Corp. (Nasdaq: SINA) is down 40% from its highs.
The recent action in the sector has been related to fears about accounting in China. Those fears were stoked today after the SEC said it is seeking stop orders for China Intelligent Lighting and Electronics Inc. (AMEX: CIL) and China Century Dragon Media Inc. (AMEX: CDM) after the companies' independent auditor resigned and withdrew its audit opinions on the financial statements included in the companies' registration statements.
While it could be argued they are late to the game, it appears the SEC's crackdown on China stocks is just getting starting.
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