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Why Sohu.com Inc Stock Dropped (Again) Today

By Steve Symington - Jul 7, 2015 at 12:44PM

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Again with no company-specific news, Sohu.com fell today as Chinese stocks pulled back.

What's happening: As of Tuesday at 11:30 a.m., shares of Sohu.com ( SOHU -3.73% ) were down nearly 10% for the second day in a row amid a broad pullback in Chinese tech stocks.

Why it's happening: Yesterday, Sohu plunged after investors effectively ignored actions by Chinese regulators intended to stabilize the country's markets. To be sure, the Shanghai Composite Index has pulled back 26% over the past month following a nearly 60% rise earlier in the year, and the tech-heavy Shenzhen Composite Index has fallen 5.3% so far in today's trading alone. As unease over the markets has increased this week, hundreds of Chinese firms have also suspended trading in a further attempt to stem the declines.

Again, though -- and however painful these declines might be -- shareholders should strive to maintain a level head during this turmoil, and to keep it in perspective as coupled with the year's earlier gains. In the end, these moves have little to do with Sohu.com's underlying business. Over the long term, that's where patient investors' focus should remain.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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