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 SINA
So what: SINA's Weibo accounts for 66% of the entire Chinese microblogging market, estimated at 300 million registered users, so investors are naturally concerned that the new rules will slow its breakneck subscriber growth. The move is just the latest in the Chinese government's bigger plan to crack down on what it considers to be false and harmful information on the Internet, suggesting that services like SINA and Renren
Now what: I'd look into this pullback as a possible buying opportunity. Weibo remains unprofitable, after all, and with the stock down a whopping 65% from its 52-week highs in April, it's probably safe to say that the regulations weren't a complete shock to Mr. Market. Of course, with SINA shares now down only 4% at the time of this writing, investors seem to be catching on.
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