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SINA Shares Tanked: What You Need to Know

By Evan Niu (TMFNewCow) | More Articles
November 28, 2011 | Comments (10)

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Chinese dot-com darling SINA (Nasdaq: SINA  ) tanked by 11% this morning on heavy volume, on speculation that it would be the next target of short seller Muddy Waters.

So what: Muddy Waters' short thesis reports are short-term kisses of death. Just ask the last company to be on the receiving end, Focus Media (Nasdaq: FMCN  ) , which saw its shares shed nearly two-thirds of their value at the low when Muddy Waters accused it of fraud recently.

Now what: Since the initial frenzy this morning, shares had even recovered into positive territory before slipping again, after Muddy Waters said it has no report coming on SINA. Investors in Chinese companies have been justifiably jittery amid numerous controversies of late surrounding accounting practices and alleged fraud, so even the hint of foul play sends shareholders fleeing for the exits. SINA's sell-off today is a case of "sell now, ask later" that may give long-term Fools a chance to buy this official Motley Fool Stock Advisor recommendation on the cheap.

Interested in more info on SINA? Add it to your watchlist.

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Fool contributor Evan Niu holds no position in any company mentioned. Check out his holdings and a short bio. Motley Fool newsletter services have recommended buying shares of SINA. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On November 28, 2011, at 7:40 PM, sw99 wrote:

    You can talk on timing, rumors etc -but not to invest in a falling star is a maxim.

    The reality is that we have lost 50% of investment in 6 months.

    My grandma said - dont put good money after bad.

  • Report this Comment On November 28, 2011, at 8:51 PM, bjasleep wrote:

    Add this to the long list of Chinese losers that MF has recommended. SINA, CCSC, STV, JOBS, CGA, YONG, ... and the list goes on. I am done with pure play China stocks.

  • Report this Comment On November 28, 2011, at 9:36 PM, peaceofcake wrote:

    Is there more bad news to come ? i bought SINA at 88$. It is now 59$....Will it be down to 20$ :( or what....MF recomendation.....great! flop...

  • Report this Comment On November 28, 2011, at 10:28 PM, BabyBeluga2 wrote:

    All of the negative sentiment on SINA is just that--sentiment. Patience will be rewarded when investors shift their gaze away from Europe and the supercommitee. Monetization of Weibo in 2012 will change the game in a way that surging user growth has not. The volatility is discouraging, but it will taper off in the future as the manipulators will focus their attentions on better prey.

  • Report this Comment On November 29, 2011, at 12:17 AM, mountain8 wrote:

    If you believe a short seller, you deserve what you get.

  • Report this Comment On November 29, 2011, at 7:54 AM, chrismcfool wrote:

    As much as I love SA where is the A on Sina? Its not best buy its not hold its not sell?

    50% LOSS and no word from the top what the hecks going on at the Fool?

  • Report this Comment On November 29, 2011, at 8:15 AM, TMFCheesehead wrote:

    Looks to me like there's a huge mis-understanding taking place

    http://www.businessinsider.com/sina-muddy-waters-china-wsj-2...

    Brian Stoffel

  • Report this Comment On November 29, 2011, at 2:38 PM, BabyBeluga2 wrote:

    While CEO Charles Chao's PR efforts are weak, his strength remains strategy and execution. SINA is vulnerable to rumors, the cloud that hangs over Chinese stocks, and even whatever happens on a given day at the ECB. The date of monetization of Weibo (2nd quarter 2012) and rising user numbers (250-300 million, now) are the data points to watch. The late fall of the stock price is due to factors other than the company's future prospects, and the market will come to see that fact in time. Still, this volatile stock is not for the faint of heart or for short-term investors who are not watching the ticker all day and acting accordingly.

  • Report this Comment On December 15, 2011, at 2:11 PM, peaceofcake wrote:

    any reason why it is still going down ?

  • Report this Comment On December 16, 2011, at 10:48 AM, peaceofcake wrote:

    !!

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Related Tickers

5/25/2012 4:00 PM
SINA $53.31 Down -0.06 -0.11%
SINA CAPS Rating: ***
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Focus Media Holdin… CAPS Rating: *

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