eLong Popped: What You Need to Know

• Report this Comment On August 11, 2011, at 3:55 PM, Pharcyde22 wrote:

  First, most stocks were severely beaten over the last week so you cannot accurately state the reason behind any stock that gained 10% today .

  Second, the P/E is incorrect for whichever service you use. Either it's still incorporating a 2009 quarter which may have been negative (b/c based on FY2010, it's P/E is about 50x), or it's not properly factoring that each ADR share equals 2 shares of the stock. So if they recently reported .04 per share, it's actually .08 per ADR share. The P/E you used, probably didn't make this conversion. The real P/E is actually somewhere between 40-60x no matter which metric you use (FY vs. LTM vs current FY actual + estimates).

  Third, they just had their first profitable year in 2010, so of course their FCF is not going to be great. It's not a mature company in a major industry. They have $283 million (U.S.) in cash and no debt, so they have no liquidity problems. It doesn't make sense to use value-oriented valuation analysis for a company focused on growth.

  Fourth, I've been following this company for four years, and they've always filed financial statements on time. When have they not provided timely cash flow information?

  And finally, it may be a Chinese internet company, but it's not a reverse merger, like all of the other frauds. It's majority owned by Expedia. (They have 84% voting rights ownership). Most of management are educated in U.S. and have worked for previous Fortune 500 companies. Many have come from Expedia. They have a reputable auditor (unlike the frauds). And regardless, they've never had aggressive numbers in their statements.

  I'm sorry but you've got to do your homework. A lot of completely inaccurate facts and loose assumptions.

• Report this Comment On August 25, 2011, at 4:00 PM, Bcharmour wrote:

  I really appreciate your comment on this article. I own very little e-long and I own it for many of the reasons you've stated. The thing is, I trade with Scottrade and it is true that E-long has not provided up to date information. I don't see much from this entire year. What I have found, I've found on other sites and I had to dig. It was a scary bet to make I guess because I bought it at $25, but my bet was kind of on expedia and for the long-term with only a few shares. Price target being raised to $22 is great but $$28 will feel better.

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