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 Chinese probiotics products specialist China-Biotics
So what: This has been quite a day for Chinese small caps. China-Biotics is the third stock that I've covered to get hit by fraud-ish allegations today, joining Yongye
Now what: Perhaps I'm missing something in today's drop, but it's pretty jaw-dropping if it is indeed being driven by one Seeking Alpha post. There's not a whole lot of heft to the post, and the conclusion seems to be that since the company didn't respond to a series of emails, the worst-case scenario must be true. This is no knock against the author -- he's simply sharing his personal views and investment decision. Instead, it's a knock against investors in the Chinese small-cap segment, who have become so scared of their own shadows that any small bump in the night sends them jumping through the nearest window.
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