The Chinese government apparently took over a bunch of websites recently and spooked investors. Can't blame them. Remember, these stocks trade in the U.S., but they are ADR's, so you're depending on the Chinese government to recognize ownership in the end. If the Chinese simply said, "These companies are ours," like they did with the other websites, the shares become worthless. The Chinese gov't is a brutal dictatorship and rules with an iron fist. They believe in censoring everything in order to keep their people in line, so, if the web begins to show people there what life can be like outside a dictatorship (which may cause revolts), they may simply pull the plug. This is very unlikely, but the risk is definitely there and has been brought to mind by these other takeovers.
stfu, you don't know what you're talking about cfrank.. you think Chinese Govt so stupid to shut off all the foreign investment that sustain their economy growth ? Chinese govt. shut down illegal web sites , just like US justice dept. just shut down a few gambling sites and prosecute them.. do you see GOOG, YHOO AMZN and others US internet companies took 10% drop in one day?? Hedge funds spreading false rumors about Chinese internet stocks while shorting them.. stop being stupid..