Yandex's (NASDAQ:YNDX) shares are volatile amid the discussion of the notorious ownership law, though a glimmer of hope has finally appeared in this story. I still expect that relations between the Russian government and Yandex will continue to be strained and this will be one of the key factors limiting the stock's upside in the long term. However, in the short term, there's an almost no-brainer trade - just buy Yandex shares before the coming Q3 financial results and sell shortly after their announcement.
What Happened?
On October 11, Yandex's shares went down by almost 20% during the day. The stock collapsed after the meeting of the State Duma Committee on Information Policy, where lawmakers discussed draft legislation that would limit foreign ownership in "significant information resources" (including Yandex) to 20 percent.
At the State Duma committee meeting, lawmakers couldn’t come to a unanimous decision about the bill. Committee chairman Leonid Levin said that a final decision on the legislation won’t be made until November. Spokesmen of Megafon, Rosneft (OCRNL) and industrial associations who were present at the meeting criticized the project.
In turn, representatives of the Federal Antimonopoly Service and Roskomnadzor told that they conceptually support the legislation, but some parts of it require clarification. An employee of the Ministry of Communications said that the ministry sent a negative review to the Gorelkin bill.
Later, the government prepared feedback on the bill. It is ready to support the document with some important adjustments - foreign participation in significant information resources regarding voting shares should be acceptable at the level of 50% minus one share. In addition, the bill should include clear criteria for classifying an information resource as significant in order to avoid "subjective assessments."
Source: the State Duma website
And now just look how quickly Russian officials can
