What happened
Shares of Momo (MOMO 2.83%) were sliding last month after the Chinese social network and online dating company got swept up in the sell-off in Chinese stocks toward the end of the month. A threat from the Trump administration to restrict American investment in Chinese companies, which could even include delisting Chinese stocks like Momo from American exchanges, sparked the selloff. As a result, Momo stock lost 16% over the course of the month, according to data from S&P Global Market Intelligence.
The bulk of the slide came on news about the potential delisting at the end of the month.
So what
The worst day of the month for Momo came on Sept. 27, when the stock lost 5.8% on high volume after the stock had slipped as much as 9% during the trading session. The trigger came from reports that the Trump administration was thinking about opening up another front on the trade war with China by restricting U.S. investment in Chinese stocks, news that sent shares of U.S.-traded Chinese companies down broadly.
Image source: Getty Images.
Momo and other Chinese stocks have been pressured by the U.S.-China trade war, with tariffs from both countries and a number of threats causing investors to fear a slowdown in the Chinese economy, leading them to sell Chinese stocks.
Momo has also faced challenges at home this year, as the Chinese government earlier forced it to suspend some of its social news feeds, and official authorities had also directed that its Tantan app be removed from some mobile app stores.
Now what
The situation with U.S-China trade relations is always fluid, and now there's optimism that high-level trade talks this week between the two sides will yield a breakthrough. Momo shares have already risen 6% through the first week of October on hopes for a detente and could move higher depending on how the negotiations play out. Expect the volatility to continue for Momo stock as trade talks continue.
