Shares of Fang Holdings Ltd. (NYSE:SFUN) were up 19.5% as of 1:20 p.m. EDT Friday after the Chinese online real estate portal announced weaker-than-expected fourth-quarter 2016 results, but revealed plans to return to an open-platform strategy going forward.
I admit that our two-year long transformation is a failure up to today. We did not know in depth of the new markets and new business lines. We were too aggressive in transformations at the same time with all of our business lines. We are making adjustments to our transformations. We will return to open-platform strategy in which we will support and facilitate businesses of our partners including developers, brokers and agents, property owners and buyers, and other home related companies and professionals.
For perspective, Fang's top-line decline included a 48% decrease in e-commerce services revenue, as transaction volume was hurt by tightening Chinese regulations and the company's strategic move to scale down its rental and home furnishings business. Meanwhile, revenue from marketing services similarly declined 42% as regulatory changes hurt demand for online ads from property developers.
But in returning to its previous strategy, Fang Holdings could revitalize growth by fostering a mutually beneficial platform with its partners. So with shares still down nearly 50% over the past year even after today's pop -- and while I'm content watching its progress from the sidelines -- it's hard to blame opportunistic investors for bidding Fang Holdings stock up today.