Josh

Comparing the Two Indian Internet Stocks REDF and SIFY

I have traded REDF dozens of times over the past 4 years, on both the short and long side (no position now). The important thing to realize with this stock imo is that it does have a tendency to make strong runs. Its online business is improving (we should net out the publishing business because nobody gets those kind of valuations for a magazine). However, the revenue ramp remains pathetic. After 4 years of adding everything from phone card sales to auctions to SMS to VoIP to games to blogs to contextual advertising, you would think REDF could manage to show some top line growth. REDF is not showing the growth of a GOOG or even a BIDU. SIFY is also fairly pathetic at delivering results (which is why the parent company cut it loose). To me, this indicates that the Indian market is ready for another player to come and take it by storm. Granted, REDF and SIFY could be a target for a company looking to enter this market, but we have seen a lot of Indian internet plays come and go. Can you name the largest market cap. Indian internet play in 2000? I can, as I still have some short shares that I cant cover since there is no market for it anymore. Global Online India (GOLX) once had a market cap of over $500M. Now it is worth less than $100k. I dont think REDF shares the same future, but it is certainly not the Google of India.