Nov. 25, 2013, 12:05 AM
Nov. 24, 2013, 5:30 PM
Nov. 13, 2013, 3:49 PM
- Six days after dropping in the face of Twitter's strong debut, high-flying Internet names are rallying in the wake of Chinese microblogging leader Sina's Q3 beat and strong Q4 guidance.
- The day has also seen a dismal IPO from online textbook rental leader Chegg, a WSJ report of a rejected $3B+ Facebook offer for Snapchat, and a vague afternoon rumor about M&A interest in Trulia from Realogy.
- U.S. standouts: ZNGA +7.4%. LNKD +4.8%. P +3.3%. ANGI +2.6%. GSVC +4.1% (owns a Chegg stake).
- Chinese standouts: QIHU +8.9%. SFUN +7.5%. LITB +6.4%. YY +6.9%. CYOU +6.3%. QUNR +5.7%. CTRP +3.7%.
- Baidu (BIDU +1.4%) is up moderately following news Chinese online video rivals Sohu (SOHU +1.7%) and Youku (YOKU +3%) have joined the MPAA and various entertainment/media companies in suing it for piracy. The assorted parties accuse Baidu of enabling piracy through its video search engine, as well as through video player apps and a TV dongle.
- The suit comes as Baidu ramps its content spending for its iQiyi and PPS video sites.
Nov. 7, 2013, 11:48 AM
- Even as Twitter blasts off to a $25B valuation following its much-hyped IPO, U.S. and foreign Internet stocks are giving back some more of the massive 2013 gains that have led many names to trade at steep multiples.
- One sign investors in this space are in a profit-taking mood: Zillow (Z -4.3%) and YY both sold off yesterday in spite of delivering Q3 beats (I, II) and above-consensus guidance; Zillow is adding to its losses today. Likewise, SouFun (SFUN -5.4%) has turned negative after providing a Q3 beat and strong guidance.
- Notable U.S. decliners: FB -2.4%. LNKD -2.8%. GRPN -4.7% (reports after the close). ZNGA -2.7%. P -3.8%. TRLA -5.4%.
- Notable foreign decliners: BIDU -2.4%. QIHU -6.7%. SINA -5% (generally viewed as the Chinese Twitter). DANG -6.2%. VIPS -7.7%. RENN -4.2%. AMAP -4.7%. CTRP -5.7%. YOKU -5.6%. RENN -4.2%. YNDX -5.1%. MELI -2.4% (plunged yesterday thanks to a Q3 miss). SIFY -2.6%.
- Internet/social media ETFs: FDN, PNQI, SOCL
Oct. 29, 2013, 8:21 PM
- Several Chinese Internet names recently pressured by a generally selloff in tech momentum plays are up AH after Baidu beat Q3 estimates on the back of strong growth in ad revenue/customer, and issued above-consensus Q4 guidance.
- SINA +2.3% AH. QIHU +2.1%. YOKU +2%. RENN +2.1%. NTES +2.5%. DANG +1.6%.
- NQ Mobile (NQ) is up 2.5% AH after posting a 25.1% gain in regular trading as investors welcomed its fund transfer announcement.
- Bulls and bears continue to argue fiercely over NQ's prospects. On SA, bearish Goldbaum Research observes NQ's games (offered via its FL Mobile game publishing subsidiary) appear to have been pulled from Apple's App Store, while bullish Toro Investment Partners argues Muddy Waters' track record is quite mixed, and that many firms have had a chance to look at NQ's books.
Oct. 28, 2013, 12:15 PM
- Though the Nasdaq is only down 0.1%, many 2013 Internet, solar, and enterprise software high-flyers are diving once more. Chinese names are well-represented in the group, as NQ Mobile continues crashing thanks to fraud allegations and Sohu plunges due to weak Q4 EPS guidance.
- The WSJ and NYT have each run pieces asking whether a new tech bubble is afoot, at least in certain hot sectors. "People are reaching for growth," says one fund manager quoted by the WSJ. Others argue the fact the high-flyers generally have substantial revenue, and are often profitable, makes the current situation different from the Dot.com bubble.
- Internet decliners: FB -3.4%. MELI -2.8%. GRPN -5%. ZNGA -2.7%. P -2.4%. DANG -7.6%. VIPS -7%. YY -4.8%. QIHU -5.6%. RENN -5.7%. SINA -2.4%. FUEL -4%.
- Solar decliners: JKS -12.4%. FSLR -4.8%. SOL -8.4%. YGE -8%. JASO -6.9%. GTAT -5.4%. SUNE -4.6%. SPWR -4.3%. SCTY -3.8%. STP -8.9%. TSL -13.2%.
- Enterprise decliners: CRM -3.8%. DATA -4.5%. MKTO -5.8%. WDAY -4%. DWRE -3.4%. VEEV -5.1%. IMPV -3.4%.
- Recent declines: I, II.
- Previous: Cashin sees mobile/cloud bubble
Oct. 25, 2013, 4:21 PM
- Chinese Internet and solar stocks, many of which have skyrocketed this year, have closed with decent losses after the Shanghai exchange fell for the fourth day in a row amid credit crunch worries, and as NQ Mobile continued to feel the impact of Muddy Waters' fraud allegations.
- Muddy Waters' detailed accusations regarding ghost addresses, a shell company, inflated market share figures, dubious cash balances, and spyware are likely to yield fresh scrutiny of the financial statements provided by Chinese ADRs, and could also affect the reception given to upcoming IPOs (I, II). Investor concerns about the bookkeeping of U.S.-traded Chinese firms had diminished some this year.
- Chinese Internet decliners: VIPS -9.1%. AMAP -6.1%. YY -6%. QIHU -4.8%. PWRD -5.7%. CYOU -4.7%. SINA -3.8%. LONG -3.5%. YOKU -3%.
- Chinese solar decliners: YGE -12.2%. JKS -9.4%. JASO -9%. DQ -7.2%. TSL -6.8%. CSIQ -4.8%. CSUN -4.4%.
Oct. 24, 2013, 1:19 PM
- Muddy Waters has started coverage on NQ Mobile (NQ -30%) with a Strong Sell; the firm's target price is below $1. (report - .pdf)
- MW claims at least 72% of NQ's 2012 Chinese security software revenue ($32.2M) is "fraudulent," and that much of it ($20.2M) came from a shell company called Yidatong. The firm says an investigation found Yidatong's offices were "either non-existent or completely empty."
- MW also declares NQ's third-party payments channel to be "non-existent," and its Chinese payments portal to be "purely cosmetic." It estimates (citing survey data) NQ has only a 1.4% share of the Chinese security app market rather than a stated 55%, and that Qihoo (QIHU -0.5%) dominates the space with a 73.5% share. Also, MW's store checks indicated few phones had NQ's software pre-installed, and that its prepaid card sales were limited.
- Meanwhile, NQ's apps are declared to be "spyware," and its global app revenue below $1M/year. The company's acquisitions are deemed "highly likely to be corrupt," with ghost addresses uncovered for some of them, and its cash balances "highly likely to not exist."
- Update (2:01PM ET): The selloff has worsened. NQ now -51.8%.
Oct. 22, 2013, 3:54 PM
- After opening higher in sympathy with Netflix, high-flying U.S. and Chinese Internet stocks are closing lower in sympathy with the streaming giant, which is down 8.2% after trading up over 10% AH yesterday in response to its Q3 numbers.
- In addition to Groupon, which has been stung by an ITG Research note, U.S. decliners include Facebook (FB -1.9%), LinkedIn (LNKD -1.7%), Yelp (YELP -2.3%), Zillow (Z -2.5%), and Trulia (TRLA -1%).
- Chinese decliners include Baidu (BIDU -1.6%), Sina (SINA -2.9%), Qihoo (QIHU -3%), Ctrip (CTRP -2.1%), and NQ Mobile (NQ -3.5%).
- Chinese e-commerce plays Vipshop (VIPS -3.7%) and LightInTheBox (LITB -4.9%) are also lower. In addition to the general selloff, they appear to be getting hurt by Dangdang's Q3 warning.
Oct. 18, 2013, 10:29 AM
- "We believe that Google's (GOOG +12.8%) ability to monetize experiences through engagement-based services will allow it to disrupt many hardware and software layers over time," writes Evercore's Ken Sena, exemplifying the glowing analyst commentary that has followed Google's Q3 beat.
- Sena, who is raising his PT to $1,100, sees Google's services investments pressuring near-term margins, but also creating "a stronger platform ecosystem in which more collected data, better predictive analytics, and an increased amount of screen connectivity will lead to better overall search economics in addition to new opportunities."
- Needham and Jefferies have raised their PTs to $1,150, and Deutsche has raised its target to $1,220. YouTube's mobile growth, strong paid click volumes, and the potential for Enhanced Campaigns to lift search ad sales (after doing less damage than expected in Q3) are all mentioned as reasons to stay bullish.
- U.S. Internet peers continue to rally in sympathy: FB +4.1%. LNKD +3.7%. YELP +7.8%. AMZN +3.3%. Z +3.9%. TRLA +4.8%. ZNGA +2.8%.
- Foreign Internet names are also moving higher: BIDU +5%. YOKU +6.9%. SINA +3.7%. RENN +4.4%. QIHU +4.9%. DANG +5.9%. YNDX +4%. SIFY +3.4%.
- Google's Q3 results, details, CC remarks, transcript
Oct. 4, 2013, 12:24 PM
- Chinese Internet firms, already shown plenty of love by momentum traders this year, are rallying again following the release of Twitter's public S-1.
- Chinese microblogging leader Sina (SINA +4%) is among the gainers, and so are fellow social networking plays YY (YY +3.2%) and Renren (RENN +9.7%). But several other names are also taking part in the rally: BIDU +2%. NQ +2.7%. CYOU +6.9%. DANG +4.1%. SOHU +5.4%. SFUN +5.8%. AMAP +3.4%. QIHU +2%.
- Twitter mentioned in its S-1 78% of the 218.3M monthly active users it had at the end of Q2 were outside the U.S. But few of them are in China, where its services (like Facebook's) are generally blocked.
Sep. 26, 2013, 6:00 PM
- Things have turned bitter between Qihoo (QIHU) and SOHU after the latter sold a 36.5% stake in its Sogou search unit to Tencent instead of to Qihoo, as had been speculated. After trading barbs publicly, the two companies are now suing each other over allegations that both companies' software is switching users' browser preferences without permission.
- Beneath the surface of verbal and legal jabs, Qihoo may damage Sohu in a more material way. Wedge Partners analyst Juan Lin notes, "A significant share of Sogou’s search traffic is through traffic acquisition (around 40%) and directed by the Sogou browser. Since Qihoo’s PC anti-virus software has penetrated into over 90% of Chinese internet users, we think it may create difficulties for Sogou to further develop its search engine and browser."
- Further, "[T]here is a risk that Qihoo will reduce the traffic it directs to Sohu video. Currently around 10% of Sohu video traffic comes from Qihoo, and the share has been increasing rapidly."
Sep. 16, 2013, 2:51 PM
- Baidu (BIDU -0.3%) has begun selling a CNY198 ($32) HDMI stick that allows users to stream content (via Wi-Fi) from PCs and mobile devices to a TV set. The product, which bears a very strong resemblance to Google's much-praised Chromecast, supports content from Baidu's iQiyi video site, among other sources.
- Baidu has been expanding its hardware lineup lately. The search giant has already rolled out dongles for creating Wi-Fi networks and remotely downloading content, and partnered with local electronics giant TCL to offer smart TVs with plenty of built-in Baidu services.
- Meanwhile, Citi is defending Baidu rival Qihoo (QIHU -5.1%) as shares sell off on news Sohu's Sogou unit is merging with Tencent. The firm still expects Qihoo to grow its Chinese search share to 28% in 2014 via organic growth, and says checks indicate Baidu's acquisition of 91 Wireless hasn't yet "meaningfully hurt" Qihoo's app store position.
- Earlier: Baidu higher after Sohu merges with Tencent
Sep. 16, 2013, 9:17 AM
Sep. 16, 2013, 8:23 AM
- SOHU gains 6.4% premarket after announcing a strategic cooperation deal with Tencent (TCEHY.PK, TCTZF.PK), initiated by Tencent investing $448M and the two merging their search businesses. After the deal, Tencent will own 36.5% of Sogou's equity capital, which could further increase to 40% in the near future.
- Off 5% premarket is Qihoo (QIHU) which had been speculated as the buyer of Sohu's Sogou search unit.
- Press release.
- Conference call to discuss the transaction begins at 8:30 ET.
Sep. 13, 2013, 5:24 PM
- Youku's (YOKU +9%) Tudou mobile video apps will integrate a Qihoo (QIHU -2.5%) "handset cleaner" tool that scans phones for viruses and promises to improve device performance.
- The partnership is tied to Qihoo's Highlights initiative, which gives 3rd-party developers access to its security APIs. Qihoo claims nearly 100 apps now support the initiative.
- Both Youku and Qihoo are doing well on mobile. Youku's daily mobile video views have topped 200M, and mobile now makes up over 30% of the company's traffic. Qihoo asserts 338M smartphones used its 360 Mobile Safe security app at the end of Q2.
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