Hello, I have some questions for you guys. Disclosure: not long nor short on Sina I was just wondering how you guys value Sina. Why people are paying so much more on this stock than regular stocks. One of my friends told me to buy Sina when it was around 70$. i did not buy it because he could not tell me why i should buy this stock. he simply told me Weibo had so many users and Sina can make so much money out of it. I dont get it how this could be true. When i look at a stock, I am normally looking at the earning power and its long term earning prospective. Sina is making 1 dollars earning a year. investors pay 100$ a share for a company to return 1 dollar back per year? Additonally, Chinese High tech company has not proved their ability to turn volume into earning yet. Tech stock is extremely volatile and competitive. Furthermore , the threat of New Entrants into this industry is very high, many potential substitue products and low switching cost. I am not a Basher, I just want to pick someboy's brain, i think my way of thinking is very limited. Any thoughts?
Many thought, and still think that SINA will be another BIDU. No reason not to think so. SINA has been described as the fastest growing company in the WORLD>...monetization of WEIBO has not occurred yet. In the CC, we were told it won't be monetized for this year. That was a BIG negative. If you wait for earnings to verify the price, before you buy in...the price will be fully reflect the earnings. If you wait for AAPL to do the same, you'd never buy in. You have to consider future potential and make a decision. If you wait for the potential to be realized...you'll be buying in at top dollar and then you'll have to wait for more "future potential". IMO. SINA is growing in customers. No one was expecting to hear that WEIBO would not be monetized while they improve their product. I think that's why its plunging now.
very good point. Do you trade this stock or do you buy and hold? i think fast growing stock or high growth potential stock will be tested by market constantly. From my experience, due to the difficulty of evaluating such company's potential earnings. Positive earning surprise is very much needed or required to maintain this stock upward moving trend. Due to the high volume of speculation and manipulation, any risk event will initiate fire-sell.
should i evaluate Sina's worth Based on my experience with Chinese television company, one of biggest one makes about more than 2 billion US dollars in Revenue with similar number of Users as of Weibo, Sina's profit margin can be potentially much higher comparing to a media company. Optimally, 1 billion$ Earning. 10 billion to 20 billion would be absoluately the max market cap in the future, this is not taking inflation or chinese salary increase into consideration. Discounted back to today, 10 billion market cap max i would say.