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Qihoo 360 Technology Co. Ltd. Message Board

  • tianyiinvest2013 tianyiinvest2013 Aug 16, 2013 3:41 PM Flag

    QIHU is not a small player

    1. bought some Sep call for 80 at 2.7. because if price kept rising before earning release, I get protected.
    2. it's unlikely qihu will fall in big scale next week. the negative is out already. (no sogou deal). The positives are also out. (the My Search feature, the ctrl ctrl search feature, the 20% market share, the 30% market share by end of 2014.). But the large volume (2.5X daily average) buying on Aug 16th shows the big guys are positive. this indicates that the earning might be extremely good. for example, revenue from mobile gaming distribution business line might get tripled from same quarter last year.
    3. if it indeed fall big next week, re-exam the situation. it wouldn't make sense.
    4. the most likely situation next week is that the price will stabilize and wait for the earning release early morning on 26th.
    5. on 23rd, spend 70% money to buy Sep calls. and 30% money to buy Sep puts.

    Notes for SOGOU:

    1. No merger
    1.1 will 360 grab shares from Sogou? 360 currently 20%, Sogou 10%.
    1.2 last earning call, the cfo said it's currently not making any money and didn't expect it to make meaningful profit in near term. why would it make money in future without significant product improvement and marketing improvement?
    1.3 therefore, short SOHU.

    2. Have merger
    2.1 combined together, 360&Sougo have 30% search share already.
    2.2 next year 360 will have 40% search share. Baidu has less than 60%.
    2.3 Bing has 18%, yahoo has 10%, google has 65%. but none of them are making same amount of money as google does.

    Sentiment: Strong Buy

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    • no one from either sohu or qihu confirmed merger/deal was reported it without any confirmations from either party, just from an outside source. Bloomberg did not confirm the report was true. Writer of article could not confirm deal was dead just reported information from outside source.

      • 1 Reply to bigspend0
      • In money wise, it now makes less sense for SOHU's Zhang to sell Sougou to QIHU.

        QIHU has only 300 million in cash. So the deal has to be made primarily via QIHU's shares. However, QIHU's share price has more than doubled since early May when Zhang initialized talks with QIHU's Zhou. If the deal got made in early May and Sougou was valued at 1.4 billion, SOHU's Zhang would have actually got nearly 2.8 billion today.

        Today, QIHU's Zhou is unlikely willing to make a 2.8 billion deal to get Sogou. On QIHU's table, there are other important cards, like Mobile Gaming distribution, which can make much more significant contribution than gaining Sogou's 10% share in search...

        Remember, Search is not the only reason for QIHU's significant run-up in the past few months...

        Sentiment: Strong Buy

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