Out Fox The $treet

One of the more puzzling aspects of the China Internet stock boom has been the general lack of interest in ChinaCache International ( CCIH ) . Well until the stock recently got a major boost from limited publicity. Anybody following the original China Internet boom back in 2010 might recall that ChinaCache had a hugely successful IPO that soared 100%. The 'Akamai of China' quickly collapsed on the fears of fraud that hit every Chinese stock for the next couple of years. The stock has now doubled in the last month; yet it still trades at industry low multiples by an extreme margin. Read the full article at Seeking Alpha. Disclosure: Long CCIH. Please review the disclaimer page for more details. 

Only a month ago,  Baidu (NASDAQ: BIDU ) was struggling to stay above $90 as the company faced margin and competitive pressures from the shift toward mobile internet usage and more specifically, mobile search, that it doesn’t dominate like desktop search. The leading Chinese search provider has increased operating expenses in order to expand research and development and marketing in order to build out the mobile products and to publicize more » Disclosure: Long BIDU. Please review the disclaimer page for more details. 

With the transition to mobile search around the world, it probably shouldn’t be too surprising that Baidu (NASDAQ: BIDU ) has struggled over the last year. In fact, the dominant player in Chinese search faces a bigger issue as the Chinese move quicker towards mobile. The China Internet Network Information Center reported that the total online population rose to 591 million with wireless users surging to 464 million. The percentage more » Disclosure: Long BIDU. Read the full disclaimer page for more details. 

As last weeks article presented, Chinese Internet stocks have struggled over the last two years. Leaders such as search giant Baidu have seen losses while the S&P 500 has seen a meaningful 34% gain. Outside of the major Chinese Internet stocks, the previous group of ChinaCache , Renren , and SINA Corporation had seen losses over the last two years closer to 50%. The new group hasn’t seen the same more » Discloure: No positions mentioned. Please review the disclaimer page for more details. 

Tuesday night, China reported October inflation close to expectations at 5.5%. Though the whisper numbers expected something possibly around 5.3% and could cause a minor market sell-off on Wednesday, the news was wildly bullish. Short term the market always trades off estimates. Long term though, the trading is based on the trend. The trend for inflation in China is clearly downward. Inflation in October eased from the 6.1% annual rate in September with food prices declining 0.2% in the month. Read the full article at Seeking Alpha. Disclosure: Long ANR, FCX, CCIH. Please review the disclaimer page for more details.

At the end of 2010, China internet stocks saw a surge in interest leading to some rather magnificent IPO pops. The next Facebook, Amazon (AMZN), Akamai (AKAM), and many other leading tech companies were launched onto the US markets at sometimes very expensive prices. Investors were eager to obtain the next big thing from the fast growing China economy. Back in April I wrote about how investors should beware of the meteoric rise in the below four IPO stocks. [See China IPOs Gallop Out of the Gate: Time to Buy?] Unfortunately as months have passed, the picture isn't so bright for the sector these days. The problem relates to the distrust in China stocks in general due to numerous fraud allegations that hit the reverse merger sector. Then some previously thought to be legitimate China stocks like Longtop Financial and Sino-Forest were accused of frauds causing even the IPO stocks to come under question. Combine that with high valuations and the stocks have plunged since the post IPO p...

I'm not sure many people noticed, but Youku.com ( YOKU )  raised approximately $400M  after the close last Thursday. In total, up to an aggregate of $670M of stock was sold as pre-IPO investors cashed out close to $270M. That's assuming the over allotment of 1.8M shares were bought; those results have not been announced yet. This is remarkable considering this was a follow-on offering after the December IPO. Youku.com is the YouTube.com or Hulu of China, depending on whom you ask. It has huge growth potential, but limited revenue so far and no profits. The company will have a market cap approaching $6B after this offering.  Read the the full report on SeekingAlpha . 

On Thursday, two more stocks IPO'ed at significant gains. Unfortunately small investors were left out of the process until the stocks opened significantly higher. By that time though, these investments aren't attractive anymore and if anything the small investor comes rushing in and loses money. Nothing new in the investment world that continues to be rigged against the average small investor. Both Zipcar ( ZIP ) and Arcos Dorados ( ARCO ) rose over 25% on the first day of trading.... Read the full article at Seeking Alpha .  Disclosure: Long CCIH. Please review the disclaimer page.  

Over the last 6 months, China has had four internet related IPOs that soared nearly 100% on the first trading day. The latest came last week in the form of Qihoo 360 Technology ( QIHU ). The stock was up an amazing 134% in its market debut, but only ranks second trailing the 161% gain of Yoku.com ( YOKU ). Should you buy now? Any prudent investor should take a pause after such a meteoric rise. Sure the company has a lot of potential but most companies don't live up too such grand hype. After all, there was a reason that the investment bankers priced it so much below the closing price. Do you really think they turned down extra fees intentionally? Read the full article at Seeking Alpha .  Disclosure: Long CCIH in client and personal accounts. Please review the disclaimer page. 

ChinaCache International Holdings (CCIH) was one of the top IPOs of 2010. The company priced above the initial range at $13.9 and eventually ended up over 90% on the opening day closing at $27.15 and hitting as high as $30.70. The stock eventually peaked out at $35 over a month later on Nov 12th. So what makes the stock so appealing now? Well, after that massive IPO jump and follow through, the stock has plunged roughly 50%. Investors are fleeing this once high flyer just 3 months after its peak. The combination of a weak China equities market in January and the resignation of the COO on February 10th has been too much for investors to risk. Ironically though the Shanghai Index has had a good February and shows good technical signs this week. Seems like the better question is why have investors fled CCIH with it now trading at its 52 week lows other then the COO resignation crash lows and below to the IPO open price?...... See the full article at Seeking Alpha . Disclosure: Lo...