yadayada Posted April 25, 2014 Share Posted April 25, 2014 From the Alibaba thread, i think this deserves its own discussion. A few ideas: Go long SINA (they have alot of cash, stake in alibaba, chinese youtube, but most importantly a 56% stake in chinese twitter). Go short Weibo (the chinese twitter). Youku Toudu, the Chinese youtube, is valued at 5 billion $ now. They are still losing money. I saw a comment in the alibaba thread saying that our youtube makes around 3-4 billion$ a year in net income. Given that the China market is much larger, 5 billion$ seems extremly cheap now? Sohu sum of the parts. Havent looked into this. And obviously trying to own Alibaba directly or indirectly through softbank (but lets keep that discussion in the alibaba thread). Would love to hear some feedback from people who know more about social media stocks and who might have an educated opinion about our twitter for example. Our twitter still loses a lot of money and is valued at 26 billion$, Their twitter is valued at like 4.5 billion$ and already made a profit last quarter. It seems like these stocks could have lot's of potential to do v well in the future at current valuations, but I have to start reading I guess. It seems like there are culture differences here that can cause subtle (but over time large) difference compared to their western counterparts. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted April 25, 2014 Share Posted April 25, 2014 I'm not a fan of Chinese stocks listed on US exchanges for various reasons: - The Chinese government has laws against foreign corporations owning Chinese companies - Exchange controls - Rule of law is extremely weak. Authorities in China protect fraudsters. - Tax leakage??? The ones incorporated in PRC and in Hong Kong SAR (which is outside of PRC) are a little better than companies incorporated in other places. Link to comment Share on other sites More sharing options...
PatientCheetah Posted April 25, 2014 Share Posted April 25, 2014 From the Alibaba thread, i think this deserves its own discussion. A few ideas: Go long SINA (they have alot of cash, stake in alibaba, chinese youtube, but most importantly a 56% stake in chinese twitter). Go short Weibo (the chinese twitter). Youku Toudu, the Chinese youtube, is valued at 5 billion $ now. They are still losing money. I saw a comment in the alibaba thread saying that our youtube makes around 3-4 billion$ a year in net income. Given that the China market is much larger, 5 billion$ seems extremly cheap now? Sohu sum of the parts. Havent looked into this. And obviously trying to own Alibaba directly or indirectly through softbank (but lets keep that discussion in the alibaba thread). Would love to hear some feedback from people who know more about social media stocks and who might have an educated opinion about our twitter for example. Our twitter still loses a lot of money and is valued at 26 billion$, Their twitter is valued at like 4.5 billion$ and already made a profit last quarter. It seems like these stocks could have lot's of potential to do v well in the future at current valuations, but I have to start reading I guess. It seems like there are culture differences here that can cause subtle (but over time large) difference compared to their western counterparts. Thank you for taking my idea Link to comment Share on other sites More sharing options...
yadayada Posted April 25, 2014 Author Share Posted April 25, 2014 yeah im just summarizing all the things from the alibaba trhead. Link to comment Share on other sites More sharing options...
constructive Posted April 25, 2014 Share Posted April 25, 2014 I like the companies like BIDU and NTES that are more mature, so you can see how good their economics are. A lot of these are earlier in development so the eventual level of profitability is more guesswork. Link to comment Share on other sites More sharing options...
yadayada Posted April 25, 2014 Author Share Posted April 25, 2014 So I thought it would be interesting to make a list of the equivalents and see what their Alexa ranking is. Chinese google = Baidu.com Nr 1 in China http://www.alexa.com/siteinfo/baidu.com Chinese Bloomberg/Msn.com nr 4 in China http://www.alexa.com/siteinfo/sina.com.cn Chinese Youtube? Youku nr 18: http://www.alexa.com/siteinfo/youku.com vs Youtube: http://www.alexa.com/siteinfo/youtube.com Seems people spend a lot more time on youtube, and it gets more views Chinese Amazon ranked 39 in China: http://www.alexa.com/siteinfo/amazon.cn VS Tmall.com on nr 7 http://www.alexa.com/siteinfo/tmall.com Twitter, is Weibo.com on nr 6: http://www.alexa.com/siteinfo/weibo.com vs WeChat.com on nr 1800: http://www.alexa.com/siteinfo/wechat.com vs QQ.com owned by Tencent, ranked nr2 http://www.alexa.com/siteinfo/qq.com Chinese Ebay, clearly the leader at nr3: http://www.alexa.com/siteinfo/taobao.com Chinese Facebook: Renren on nr 93: http://www.alexa.com/siteinfo/renren.com Kaixin on nr 273: http://www.alexa.com/siteinfo/http%3A%2F%2Fwww.kaixin001.com Various video sites Tudou(owned by same company as Tudou), i think this is their streaming equivalent. Rank 83 http://www.alexa.com/siteinfo/http%3A%2F%2Fwww.kaixin001.com Cntv rank 57, think this is like an ESPN in china: http://www.alexa.com/siteinfo/cntv.cn Ku6.com, I think this is for Chinese movies? Rank 129 http://www.alexa.com/siteinfo/ku6.com Xunlei, some sort of video on demand, rank 113 http://www.alexa.com/siteinfo/xunlei.com Sohu.com Rank 8, but they also offer a search engine: http://www.alexa.com/siteinfo/tv.sohu.com Seems like they are losing to Baidu who stand nr1 Letv.com. China's hulu ranked 105 http://www.alexa.com/siteinfo/letv.com I can go on with the video sites, but it is clear that for user generated content Youku.com is the clear leader. When it comes to netflix and hulu.com type websites, this seems really hard to gauge. And I guess competition is severe. When it comes to twitter like websites, seems like there are 2 competitors and QQ.com is indeed winning. http://www.alexa.com/topsites/countries;0/CN Interesting that Sina is so popular. Also a lot of layouts on these websites are absolutely god awefull. Seems like this industry really is in its infancy over there. Link to comment Share on other sites More sharing options...
hillfronter83 Posted April 25, 2014 Share Posted April 25, 2014 I'm not a fan of Chinese stocks listed on US exchanges for various reasons: - The Chinese government has laws against foreign corporations owning Chinese companies - Exchange controls - Rule of law is extremely weak. Authorities in China protect fraudsters. - Tax leakage??? The ones incorporated in PRC and in Hong Kong SAR (which is outside of PRC) are a little better than companies incorporated in other places. Certainly there are risks involving such companies. Here is a blog that might be interesting: http://www.chinalawblog.com/2011/07/thinking_clearly_about_chinese_companies_listed_on_us_stock_exchanges.html Link to comment Share on other sites More sharing options...
PatientCheetah Posted April 25, 2014 Share Posted April 25, 2014 From the Alibaba thread, i think this deserves its own discussion. A few ideas: Go long SINA (they have alot of cash, stake in alibaba, chinese youtube, but most importantly a 56% stake in chinese twitter). Go short Weibo (the chinese twitter). Youku Toudu, the Chinese youtube, is valued at 5 billion $ now. They are still losing money. I saw a comment in the alibaba thread saying that our youtube makes around 3-4 billion$ a year in net income. Given that the China market is much larger, 5 billion$ seems extremly cheap now? Sohu sum of the parts. Havent looked into this. And obviously trying to own Alibaba directly or indirectly through softbank (but lets keep that discussion in the alibaba thread). Would love to hear some feedback from people who know more about social media stocks and who might have an educated opinion about our twitter for example. Our twitter still loses a lot of money and is valued at 26 billion$, Their twitter is valued at like 4.5 billion$ and already made a profit last quarter. It seems like these stocks could have lot's of potential to do v well in the future at current valuations, but I have to start reading I guess. It seems like there are culture differences here that can cause subtle (but over time large) difference compared to their western counterparts. I did a lot more research. If you can't hedge out Weibo (I can't get borrows from my broker), Sina is likely to be a value trap. Sina and Weibo's businesses are both going downhill based on recent quarter performances. Social network is a winner take all industry. Link to comment Share on other sites More sharing options...
ItsAValueTrap Posted April 25, 2014 Share Posted April 25, 2014 I'm not a fan of Chinese stocks listed on US exchanges for various reasons: - The Chinese government has laws against foreign corporations owning Chinese companies - Exchange controls - Rule of law is extremely weak. Authorities in China protect fraudsters. - Tax leakage??? The ones incorporated in PRC and in Hong Kong SAR (which is outside of PRC) are a little better than companies incorporated in other places. Certainly there are risks involving such companies. Here is a blog that might be interesting: http://www.chinalawblog.com/2011/07/thinking_clearly_about_chinese_companies_listed_on_us_stock_exchanges.html Well I learned the hard way that China really doesn't work the way I think it works. Apparently you can run away with a real business and all of the cash (!). I forgot to mention that many stocks that are listed on both PRC and non-PRC exchanges have price disparities. The shares listed in China get a premium valuation. So you have to wonder why Chinese founders would want to list their company outside of China. Chinese stocks (especially reverse mergers) are the one area of the stock market where fraud is extremely high and the shenanigans committed are rather egregious (e.g. running off with everything). Because there are close to zero consequences for committing fraud and because Chinese authorities are kind of on the fraudsters' side, you have to deal with an extreme level of adverse selection. And then when you think you understand Chinese fraud... maybe you find out the hard way that you don't understand it. For example, it's extremely unintuitive that Chinese firms were able to easily fake their cash balances to big four auditors. Cash is one of the easiest things to audit, yet local branches of banks were corrupted into providing fake bank confirmations. There are things about China that are unintuitive. I'm not sure if honest Chinese business owners would want to list their company on foreign exchanges for legitimate reasons. 2- I think I'm wrong about Chinese stocks listed on Hong Kong exchanges being ok. Link to comment Share on other sites More sharing options...
yadayada Posted April 25, 2014 Author Share Posted April 25, 2014 I think that Chinese people enjoy youku and soku and all that stuff because they've never really gotten to use youtube or anything superior. From an outsider perspective is just blows chunks like most Chinese websites basically. It tries to imitate youtube but is uglier, it farts ads at you (not nearly as bad as the wasteland a lot of Chinese websites are), and its content just sucks. That, however, is more a result of having your government make decisions on what is acceptable to be put in the media, so it's tons of crappy soap operas with girls acting like spoiled little shits and their boyfriends bending scraping and being their bitches. Anti-Japanese world war 2 tripe abounds as well. Shitty fucking soft-pop songs about love or leaves or nostalgic pianos. Censorship means that people can only produce material that is branded as 'safe' for consumption, adhering to a very specific image of China that was made in board rooms to be sold domestically and abroad. Unfortunately board room cultural synthesis tends to look fake and like a cheap imitation of things that were successful elsewhere. Youku and most Chinese products would probably be way better and more palatable, given time, without some 5'2 sixty year old man and his cadre of asskissers in the Ministry of Culture trying to brand and market China as a nation of nice, clean, moral, civilized, boring people instead of letting it be itself. In my experience, stuff that the Communist Party can't get its stumpy little fingers in can be pretty cool - there's a club in Wudaokou that until recently had an awesome heavy metal scene. Those Chinese metal bands thrash fucking hard and really knew how to rock, same with their hip-hop artists. The creativity and artistic talent is most definitely there, and the potential is burgeoning. It's too bad it's stifled. quote from what I think is a chinese person on reddit Link to comment Share on other sites More sharing options...
hillfronter83 Posted April 26, 2014 Share Posted April 26, 2014 I'm not a fan of Chinese stocks listed on US exchanges for various reasons: - The Chinese government has laws against foreign corporations owning Chinese companies - Exchange controls - Rule of law is extremely weak. Authorities in China protect fraudsters. - Tax leakage??? The ones incorporated in PRC and in Hong Kong SAR (which is outside of PRC) are a little better than companies incorporated in other places. Certainly there are risks involving such companies. Here is a blog that might be interesting: http://www.chinalawblog.com/2011/07/thinking_clearly_about_chinese_companies_listed_on_us_stock_exchanges.html Well I learned the hard way that China really doesn't work the way I think it works. Apparently you can run away with a real business and all of the cash (!). I forgot to mention that many stocks that are listed on both PRC and non-PRC exchanges have price disparities. The shares listed in China get a premium valuation. So you have to wonder why Chinese founders would want to list their company outside of China. Chinese stocks (especially reverse mergers) are the one area of the stock market where fraud is extremely high and the shenanigans committed are rather egregious (e.g. running off with everything). Because there are close to zero consequences for committing fraud and because Chinese authorities are kind of on the fraudsters' side, you have to deal with an extreme level of adverse selection. And then when you think you understand Chinese fraud... maybe you find out the hard way that you don't understand it. For example, it's extremely unintuitive that Chinese firms were able to easily fake their cash balances to big four auditors. Cash is one of the easiest things to audit, yet local branches of banks were corrupted into providing fake bank confirmations. There are things about China that are unintuitive. I'm not sure if honest Chinese business owners would want to list their company on foreign exchanges for legitimate reasons. Not to argue the fact that there were a lot fraud in these reverse mergers. But you have to remember that most of these companies are microcap and riskier than a normal company. Here is an interesting research regarding these CRM: I can think of a few reasons why a legit Chinese company wants to list oversea: 1. The premium on Chinese exchange didn't exist until the bull run in 2007-2008. Before that, Chinese companies' share traded at a discount on Shanghai exchange compare to Hong Kong exchange. 2. There were regulation restrictions that kept many of the companies we talked about here from listing in China. One of them was showing positive profit for 3 consecutive years, which most of the internet companies were not able to in their early years. 3. Many of such companies were backed by venture investors here in US, who would probably prefer US listing. SINA was backed by Dell and SOHU was backed by Intel. Many legit companies were taken private by majority owners after muddy water short wave that drove their stock prices down. For example, SNDA was taken private at 20% premium by its founder in 2011. This suggests that there are probably value to be found. Link to comment Share on other sites More sharing options...
saltybit Posted May 17, 2014 Share Posted May 17, 2014 Baidu hires Andrew Ng to start Research Lab in Silicon Valley. (famous Machine Learning/Artificial Intelligence Stanford professor) http://www.technologyreview.com/news/527301/chinese-search-giant-baidu-hires-man-behind-the-google-brain/ Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now