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Baidu (BIDU -9.4%) and Sina (SINA -13.1%) plunge on rumors the DOJ is investigating claims of...
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Thursday, September 29, 2011, 11:10 AM ETBaidu (BIDU -9.4%) and Sina (SINA -13.1%) plunge on rumors the DOJ is investigating claims of accounting fraud at the companies. Other Chinese Internet stocks are also getting hit: SOHU -9.4%. YOKU -14.5%. TUDO -5.9%. PWRD -3.8%. SNDA -3.8%.
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This news story has 7 comments:
Why is their fraud any surprise to anyone?!
"Nearly one third of securities fraud cases on file in the last 60 days are Chinese companies, most of them microcap stock fraud cases."
" There were around 24 securities fraud cases brought against Chinese companies traded in New York in 2010."
"But what it does is shed a light on the fact that Chinese companies are not playing by the same rules. There are dozens of mini-Enrons and WorldComs run by Chinese managers. But there are also the major large cap name brands, who may not be entirely cooking the books, but survive by off-balance sheet, unaccounted for loans and cash. In short, no one knows what Chinese companies are really worth. Yet, many companies, like internet search engine Baidu (BIDU), are trading at nearly 50 times forward earnings. No one seems to mind, either."
All taken from the same article. Additionally, do tell why China has the largest theft of intellectual property of any country in the world?
Look, I am not saying the US is much better, I am just sick of everyone being "shocked" when another Chinese company is using accounting fraud to make themselves look good. I am advising a healthy dose of skepticism. But, at least the Chinese government has one thing right...they execute the leaders of fraudulent companies instead of giving them more money.