SINA is fine, but fear rules the market for the moment. While a buyout is a possibility, SINA itself is a strong company in my view. The stock, like the rest of the market, will be volatile until the Fed rate hike is digested and the meaning of oil and commodity price fluctuations is better understood.
It is in step with the rest of the market and corresponds with oil prices. There is no specific news about SINA except the Board changes. Wait.
Today it seems the entire market is moving with the price of oil, the new Dr. Copper in the view of some. It does not make much sense for Chinese stocks, given that China benefits from low energy prices.
Fosun owns 8.8 percent of SINA, but there is no hint that SINA is in any way involved with potential scandal. In the worst case, it seems to me, Fosun investments might be frozen for a time and there will be another cloud of suspicion hanging over Chinese ADRS for a little while.
If current stock prices reflect a lack of love for China, what could change the situation? Until this week, I was beginning to think The China Internet sector might be gaining safe-haven status.
Agreed. Wall Street has been slow to see the full value of Chinese ADRs in many cases, and SINA has been underestimated for some time. I hope WS does the math.
True. Without news, suspicion of Chinese ADRS seems to take away half the market cap. Another result, though, is sometimes stronger reaction when concrete news does come out. Sometimes it also takes the market a long time to digest the relevant news. Yet another result is that there can be significant volatility that is unrelated to any news at all. . . If you are information-oriented, Chinese ADRs such as SINA can be maddening.
It is a puzzler. The Fosun scandal could be just rumor. Assuming that it is not, it is still hard to correlate the SINA stock drop today with the story, as there is no evidence SINA is implicated. Fosun has invested in SINA as well as many other companies that did not experience stock drops today. The theory that Fosun had insider information about an Alibaba takeover of SINA has no apparent support and, if true, would not be entirely negative news for SINA stock. Tomorrow might be clearer?
It is possible. On the other hand, there is the possibility that they must hold dozens of ceremonial banquets before the deal is done. How about some American speed?
It would seem to suggest quite the opposite. Arn't holdings sometimes frozen until legal questions resolved? Some might be selling on the Fosun story without pondering long-term implications. . .
Might be. But Fosun has broad holdings. While would it affect only SINA stock price? A theory is that Fosun held insider info on an Alibaba/SINA buyout or transaction. Implications? Long delay in buyout until legal matters settled?