Stocks can stink sometimes
In a week that was loaded with a Fed rate cut and hundreds of telltale earnings reports, I couldn't help noticing that the IPO market tends to go more smoothly if you're a rapidly growing Chinese company.
CNinsure (Nasdaq: CISG ) went public on Wednesday and soared 56% higher on the first trade. On Thursday, Giant Interactive (NYSE: GA ) , the company behind ZT -- one of China's fastest-growing online multiplayer games -- priced its IPO at $15.50 and opened 18% higher.
You're not necessarily finding insurance brokers and gaming companies going public domestically. The key here is that these stocks offer growth, since they sit on the coattails of a booming Chinese market.
It was a busy week, so let's dip briefly into a few of the intriguing financial headlines.
- What's more bloated: Chipotle (NYSE: CMG ) (NYSE: CMG-B ) , or the analysts who can't keep up? Before you argue that I left out the stock's valuation as a third bloated choice, go join the skeptics at the end of the line. Chipotle's earnings surged 75% higher in its third quarter. The burrito baron has obliterated Wall Street expectations in each of its first eight quarters as a public company. The company's already proved that it can manage to stuff a tasty tortilla -- now it's showing investors that it's equally adept at managing expectations.
- Rumors that Google (Nasdaq: GOOG ) will enter the cell-phone market continue to heat up. This time it's The Wall Street Journal citing sources that expect an announcement within the next week or so. I'm not sure I see the allure in a Gphone, unless we're talking about heavily subsidized Web usage. Can "Ringtone Ads by Google" be too far away?
- The Federal Reserve chose to lower rates on Halloween. What's up with that? Did Ben Bernanke think his house would get egged if he didn't deliver a treat to distressed borrowers?
- Crocs (Nasdaq: CROX ) , finally proving mortal, disappointed investors with puffy inventory levels and subdued near-term guidance. When its shares fell by 36% on Thursday, it put more holes in portfolios than some of its own shoes have. I still believe in the company, though. The market is underestimating its push into new product categories, and the laid-back outlook isn't as bleak as the price drop would make it seem. To be fair, I was also bullish a week earlier, and I was wrong to be upbeat about the stock at much higher levels.
Until next week, I remain,