Has irrational exuberance given way to panic selling? Internet stocks are off again today, as the Street registers disappointment with earnings reports from AOL, Groupon, Zulily, SouFun, 500.com, and King.
Smart bargain hunting or catching a falling knife? After being bludgeoned almost ceaselessly over the last couple of weeks, many high-beta tech stocks are closing the day with sizable gains.
The rebound comes on a day when hedge fund Coatue Management announced plans to return over $2B to investors following a 9% March decline caused by tech stock losses. It also comes as several tech giants, including Apple, Microsoft, H-P, and IBM, finish the day near breakeven, or with modest losses.
Leading U.S. Internet gainers: LNKD +6.2%. P +6%. ZU +5%. SALE +7.2%. SSTK +6%. AOL +4.6%.
Chinese Internet gainers: EJ +9.1%. WBAI +8.9%. QIHU +7.9%. ATHM +8.1%. YY +6.8%. SFUN +8.7%. GOMO +9.8%. Ctrip and Qunar were among the sector's biggest gainers following M&A rumors.
Hit hard on multiple trading days last week, high-beta Chinese Internet and solar stocks are flying higher amid a tech rally.
Leading Chinese Internet gainers: GOMO +14.8% (tumbled last week post-earnings). BITA +10.2%. WUBA +8.9%. VIPS +6.4%. SFUN +6.4%. WBAI +6.3%. CCIH +5.9%. ATHM +5.8%.
Notable Chinese solar gainers: CSUN +9.7%. JKS +8.9%. TSL +5.4%. YGE +4.1%. JA Solar is rallying with the help of a bullish Northland coverage launch.
Recent IPOs King Digital (KING +4.5%) and Castlight Health (CSLT +16.1%) are among the winners. King remains 16% below its $22.50 IPO price. Castlight is 54% above its $16 IPO price, but well below a post-IPO high of $41.95.
Aided by King's poor debut and general momentum stock weakness, U.S. and Chinese Internet stocks have fallen hard for the second time this week.
In addition to King rival Zynga and newly-minted VR headset maker Facebook, Twitter (TWTR -7.1%) is among the leading U.S. decliners. Exactly 3 months after reaching a peak of $74.73, shares have fallen below their post-IPO opening price of $45.10. They remain well above their $26 IPO price.
Other U.S. decliners: P -5.2%. Z -6.2%. TRLA -7%. GSVC -4.8%. SVVC -4.1%.
Sungy Mobile's (GOMO) Q4 revenue beat consensus by $500K, and its EPS by $0.11. The company expects Q1 revenue of RMB92M-RMB95M ($14.8M-$15.3M); the sole Q1 sell-side revenue estimate is at $14.9M.
Q4 gross margin was 75.1%, up from 65.3% a year ago. While revenue rose 63.5%, opex rose 82.1% Y/Y to $8.7M.
Mobile app product/services sales were Sungy's main growth driver, rising 230.7% Y/Y to $8.4M. Mobile reading services +15.9% to $4.3M, mobile portal ads -12% to $2.4M. A 407.6% Y/Y increase in ad sales for Sungy's GO apps fueled mobile app product growth.
Total GO app users rose 76% Y/Y to 364M, but paid downloads only rose 18.2% to 600K. GO monthly active users rose 44.6% to 94M.
In Sohu's case, the rumor mill might also be helping out. A source tells Marbridge Consulting Sohu CEO Charles Zhang and Tencent (TCEHY +1.2%) CEO Pony Ma have talked about merging their companies' online video units. Both Sohu and Tencent trail market leaders Youku and Baidu in China's burgeoning online video market.
Dangdang (DANG +8.6%) is adding to yesterday's big post-earnings gains after Oppenheimer hiked its PT to $15. The firm likes Dangdang's improved efficiency and partnerships with e-commerce rivals (inc. Alibaba's Tmall), and the fact mobile accounted for 13% of Q4 orders.
On a good day for many tech momentum plays, solar and Chinese Internet stocks led the way.
Solar names could be benefiting from Chinese government remarks suggesting Beijing remains open to trade talks to end its ongoing solar import dispute with the U.S. The comments come after the ITC added Chinese solar panels made with Taiwanese cells to its list of Chinese panels covered by import duties.
Also: SunEdison (SUNE +6.6%) has filed for an IPO for its solar project business, a move that could entice other companies with major solar project ops to do the same.