Code JDMBA2b: March 2005

Thursday, March 31, 2005

Need For Legal Reform in China

China Daily recently published this story:
"Gamer slays rival after online dispute"

Basically an online game player killed someone who sold the "Virtual Dragon Sabre Weapon" used in Legend of Mir III after he borrowed it and failed to pay him for it. After the accused reported the "theft" to the police he was advised there were no laws protecting "online cyber weapons" since they are not considered "real property" under law.

I am not saying that the death was solely a result of the lack of proper intellectual property laws in China! Certainly online game addiction and possibly some mental problems could have been possible contributing factors. I am worried that with the rise on online gaming addiction in China and problems with theft of such virtual items more government regulation could be on the horizon. We shall see what develops and how it will effect the online game business in China.

Here is the entire story from China Daily:

3G is Coming to China Soon

From China Daily:

"The Chinese Government should roll out its third generation (3G) of wireless telecommunications strategies as soon as possible to keep up with 3G development worldwide, according to Gao Yan, president of Mobile Networks with Siemens (China) Communications Group.
"I believe both telecom operators and equipment providers and handset terminal makers are ready for the take off of 3G in China," he told China Daily yesterday in an interview.
It is widely projected that the government will release 3G licenses later this year."

Read the full article here:

Lets hope that the conversion to 3G will bring increased revenue to the China's WVAS providers.

Everything Is Negotiable

People told me I was crazy. Everyone I talked to thought there would be no way that I could negotiate with my apartment complex and get the entire summer (3 months) free and only sign a new 9 month lease at the same rates we are paying now. Many local apartments are sold out and or raising rental rates right now.

Today I did just that. Not only did my roommate and I convince our apartment to let us sign a new 9 month lease September-May instead of a 12 month lease starting June 1st, we also convinced them to give us the apartment this summer for free. Anything truly can be negotiated.

Some of the tactics I used:
  1. I was very polite
  2. I told them we liked living there
  3. I offered to pass out a few business cards and tell a few incoming law students about the apartment complex for next year.
  4. I told them that living closer to campus would be more convenient.
  5. I led them to believe that I would move if they did not give us the summer free.
  6. I told them I hated to move and did not want to move my things into storage for the summer and then move back in the fall.
  7. I told them I would be working for a law firm in another state this summer and did not want to move twice. Either they would have to agree to give us the summer free or I would move all my stuff to another place closer to campus now and live there next fall when I come back. I did not want to move all my furniture, etc out of state for the summer and then have to move it back next fall.

What happened?

First they sent us a letter and offered us 12 months at the regular price with no rent increase, we refused. I went to the office to pick up a package they were holding for me and they offered us 1 free month, I refused and left. Later they offered us 2 free months, we refused and finally they offered us 3 months free with a 9 month lease at our current rental rate and we agreed.

I also have free housing in my home city where I will be working for a law firm this summer which means I will be paying absolutely no rent!

Sogou Search Engine From Sohu

I have used (and had some of my Chinese speaking friends test) Sohu's new search engine. I think the new version is much improved and appears to provide good search results at a much faster speed. I also think it compares relatively well to and hope it can help SOHU gain some more market share in online search.

Look at the Sogou traffic data as reported by Alexa:

Sogou initially did well upon initial launch last year but then quickly lost much of the traffic and people realized the engine was not that great. Upon the recent launch of Sogou version 2 they also have increased traffic dramatically. Look at the 1 year and 3 month traffic rankings on Alexa.

This time the engine is of much higher quality so the traffic is not falling off drastically like last time. I am worried that some Chinese are not using Sogou because they tried it last year and did not like it then or are already used to using,, or others. I hope SOHU will increase their marketing budget substantially this year to promote Sogou so that more people become aware of and start using it.

Wednesday, March 30, 2005

Recent Stock Purchase

I made another purchase this morning. I had owned some shares of TLK last year but sold them at a significant profit months ago. With the recent sell off I found the value of TLK shares too hard to resist. The forward PE ratio is only 8.53 currently based on average analyst estimates $2.2o for 2005 according to Yahoo Finance:

With low wireless penetration rates in Indonesia revenues growth should be healthy over the next few years. I do not think the Tsunami or recent earthquakes will significantly hurt TLK long term. Some possible concerns going forward:

  1. Political unrest
  2. Regulatory environment
  3. Impact of new competitors entering the market (Such as Hutchinson Telecom and others)

Some other stocks I am looking at adding to my portfolio soon:

  1. PSPT (Low valuation compared to INFY, WIT, etc. PSPT is not the lowest cost outsourcing provider but many American firms will like PSPT since many of the people in the Philippines speak much better English as compared to other countries where outsourcing is common.)
  2. KONG (Extremely low valuation, lots of cash and leadership position in 2.5G including WAP, MMS, and Java. Biggest concern going forward are unknown possible changes to regulatory environment and revenue sharing agreements with the China Mobile, China Unicom, etc.)
  3. LONG (Very large cash position relative to market cap. I would not expect to see much in the way of profits in the short term. I am more interested in the low valuation and long term growth strategy with the help of IACI for guidance. One possible concern is that IACI will just use LONG to cross market services from,, etc and gain a foothold in China without much regard for eLong's bottom line.)

Please note I am not making any investment advice on this blog. I am merely stating my opinions. Please do your own investment research. I am in no way encouraging any of my readers to buy or sell any security I talk about on my blog.

Revised Summer Plans

I have decided to cancel my summer study abroad plans:

I have never been to Hong Kong and was very interested in the program:

The white collar crime, privatization and capital markets classes interested me the most:

However I decided the opportunity to work at a corporate law firm my first summer was too difficult to turn down. I will be working in the corporate litigation department of a law firm in the city where I grew up. I still am interested in visiting China and hope that I am able to find another opportunity to spend some time abroad in the not too distant future.

Sunday, March 20, 2005

Spring Break

I am on Spring Break this week. I will be busy traveling to interview at a few more firms and working on my trial brief for the Moot Court write on. It is likely that I will not be able to post very much this week.

Right now I have some extra cash in my brokerage account that I would like to invest. I will be doing some research and financial modeling on several stocks that I have been looking at. I will plan on posting my conclusions next week.

Tuesday, March 15, 2005

Tom Online Conference Call

Nothing too surprising was said. Some of the points made on the call:

  1. Tom Online has a very strong position in both the IVR and WAP markets which should grow strongly this year.
  2. MMS revenue growth will be stunted this quarter during the MISC billing platform transition.
  3. Game portal will be launched this year.
  4. Tom/Skype software is being downloaded at the rate of 50,000 per day. The technology seems to be particularly attractive to online gamers and should help drive more traffic to the portal.
  5. They did not give that much detailed information on India Games. I am looking forward for future updates on this acquisition.
  6. Advertising revenues is still very small relative to wireless revenues. Tom Online is very dependant on wireless.
  7. They do not see China Mobile changing revenue share agreements anytime soon particularly for the newer services they hope to grow on the network. They noted on the call that the carrier also collects usage fees for the wireless services and thus makes more that the 15% share in the 85/15 split would imply.
  8. Tom Online wants to continue to emphasize its portal as the focal point of its business.
  9. Many acquisitions were made in 2004. I believe Tom Online has been more intelligent in their acquisitions compared to Sina, Sohu and others.

Listen to the conference call here:

TOMO 4Q Profits up 13% Quarter Over Quarter

I am pretty happy with the results and guidance. As of right now now my TOMO shares are up over 4% today. Here is the story from Pacific Epoch:

I am particularly excited to see how the India Games and the Tom Online/Skype Venture play out in 2005. I plan on listening to the conference call later tonight and will post some more comments later.

Monday, March 14, 2005

51 Jobs Misses Revised 4Q 2004 EPS Estimates

After failing to achieve even their own revised EPS estimates JOBS was slammed today on the NASDAQ. I am glad I am not a shareholder! From an annual high over $55 a share back in December JOBS closed today at $16.60.

Here is the press release:

I am currently long Tom Online. Lets hope that TOMO does better tomorrow!

Studying In China This Summer

One of my major regrets during college was never studying overseas. I have decided to study law in China (Hong Kong) this summer. My decision was based on several factors:
  1. I am very interested in China and would be interested in helping to facilitate the increasing demand for foreign investment in the country.
  2. Living in China will be a great way to jump start my language skills which I plan to begin developing over the next few years.
  3. As a law student there will be major pressure for me to accept a traditional summer associate position at a major corporate law firm in the U.S. after my second year of law school. This may be my last opportunity to spend and extended period of time in China to see if I would like to work there after graduation.
  4. I am very interested in finance and Hong Kong is one of the top financial markets in the world along with NYC and London.

The program will not last the whole summer. I will try to negotiate a split summer at one of the U.S. firms I have been talking to so that I can go on the trip. If that does not work I will likely accept a government legal position (probably unpaid) for the part of the summer I am in the U.S. or agree to take a business (not law related) position at a firm flexible enough to accommodate my travel plans.

Sunday, March 13, 2005

My Interview By Videoconference

I have been involved in a number of Videoconferences over the years. Last week I had my first interview by video conference. Some conclusions:

1. Interviews by Videoconferences are becoming more common for firms recruiting at the business school. I am aware of very few law firms who are currently using the technology for interviews.

2. Videoconferencing will likely become more common as sound and video quality rises and costs continue to fall (VOIP is sure speed up this process).

3. I feel most comfortable interviewing face to face and generally dislike phone interviews. An interview by videoconference seems to fall somewhere in between.

As a side note, I am mostly interviewing just for fun (practice) at this point. I already have sufficient opportunities to choose from for this summer. I plan to make my final decisions on summer employment over the next few weeks (I am visiting one more firm that I am very interested in over Spring break).

Wednesday, March 09, 2005

Great Analysis Of Chinese Auction Market

Here is the article from billsdue (a must read!):

It looks as if Taobao has already passed Ebay/Eachnet in the Chinese Auction market. With their higher user satisfaction, better localized website and Alipay payment system as a growth driver I doubt Ebay will catch up. I tend to agree with the author that Ebay will not succeed by simply raising their marketing budget. Ebay's global platform is apparently not working very well in China. Either they need to localize the site to better fit Chinese culture or buy Alibaba (Taobao's parent company) outright to succeed in China. Sina/Yahoo was the last of the big three (Ebay, Alibaba, and Yahoo/Sina) to launch a Chinese Auction site and although they have gained some market share are still in a distant third place.

Pacific Epoch Reports Baidu IPO Rumor

Here is the story:

Apparently Baidu may have already selected Goldman Sachs as its underwriter and will likely IPO later this year. Valuation is unclear. It appears that Baidu management thinks they should be valued much higher than Goldman estimates.

Tuesday, March 08, 2005

Correction To Prior Yahoo! China Engineer Story

From Pacific Epoch:

It looks like Li Zhao did not resign after all. He is working on a new search engine product to be released by Yahoo! China in April.

"Yahoo! China's (Nasdaq: YHOO) search engine lead engineer Li Zhao did not resign as earlier reported and is instead developing a search engine product for the company, Yahoo! China PR manager Tu Jianlu told Pacific Epoch on Tuesday. According to Tu, Li is secretly developing a new search engine product for China which will be released in April. According to a China Business report last weekend, Li and some engineers at Yahoo! China resigned and plan to form a company to develop search technology."

Monday, March 07, 2005

Beijing Announces New Anti-Secession Bill

From CNN:

BEIJING, China (CNN) --
"China has unveiled a controversial new law that would allow Beijing to use military action against Taiwan if peaceful means fail to stop the island pursuing independence.

In a highly anticipated announcement, Beijing on Tuesday released details of the planned new anti-secession bill during its annual session of parliament.

A leading Communist party official said force would be a last resort if reunification efforts fail.

China has considered Taiwan a renegade province since communist forces drove nationalists from the mainland in 1949, and has repeatedly threatened to use military power against the island if it declares independence."

"China's Congress is expected to unanimously pass the law when its session wraps up on March 14.

Details of the planned law had been kept under close wraps, and had been the subject of much speculation and concern, particularly in Taiwan, where there are fears the law will give China a legal basis to take military action against the island."

"The issue has been at the forefront in recent years because of moves by President Chen to hold a referendum on a new constitution for Taiwan which Beijing worries could include a declaration of independence for the island.

Washington is bound to defend Taiwan's security in the event of any attack from the mainland, but has increasingly warned Taipei against unilateral moves to change the status quo.

The proposed anti-secession bill comes against the backdrop of an increase in China's military budget, which has also been raising eyebrows."

Moot Court and Law Review

I have decided to try out for both Moot Court and Law Review.

At my school the Moot Court write-on packets will be released this week. My primary interest in Moot Court is to gain a better understanding of the work of a litigator to see if that is what I want to do.

I am hoping that Law Review will help me improve my legal research and writing skills. I realize that the "academic" writing in Law Review is much different than legal writing in practice. Another major reason I am interested in Law Review is to help build my legal resume for those that value law review such as the top Vault law firms and prestigious Judicial Clerkship opportunities. Law Review write-on will occur immediately after finals.

Piper Jaffray China Internet Conference

From The China Stock Blog:

"Notes from the Piper conference

Piper Jaffray held an investment conference in Beijing last week. Here are some key points from this week's Piper report:


  • Advertising, gaming, and travel showing solid growth.
  • Online gaming companies continue to show greatest potential.
  • Wireless - The industry is still unstable. The hope is that China Mobile's (ticker: CHL) upcoming decisions on the format and overall framework of relationships with service providers may bring some stability.
  • Piper believes that expectations for advertising growth are modest.

Online Advertising:

  • Industry likely to grow at a rate of 40%, despite cautious guidance of 30% by the three portals.
  • While some sectors like autos and real estate were slightly overheated last year, new segments are starting to replenish growth in the sector.
  • Prices are expected to increase 10-20% a year, given the strong demand.
  • The front pages of most portals are usually sold out well in advance. The smaller web sites are gaining market share as advertisers start to use a wider range of online destinations.

Internet Search:

  • Dominated by and (ticker: GOOG).
  • Other online destinations have yet to establish a strong brand.
  • No clear winner yet.


  • Online transactions remain minimal.
  • But listing services and auction sites (which do the vast majority of their transactions offline) are growing.

eBay (ticker: EBAY) and Alibaba:

  • Increasing competition between the two.
  • eBay's strong global power cannot be underestimated and the company's focus on China makes it even clearer that they intend to win.
  • Here too, a clear winner has yet to be determined.

Wireless Sector:

  • Sector remains unstable.
  • China Mobile has yet to finalize its framework for using service providers.
  • China Unicom (ticker: CHU) had positive comments about its relationship with service providers. It does not intend to increase its revenue shares.
  • Growth in 2.5G and IVR looks promising."

Barron's on "China Inc."

As reported on The China Stock Blog:

Barron's on "China Inc." - implications for world economies

Barron's reviews Ted Fishman's new book "China Inc." Here are the key points:

Macroeconomic trends that don't bode well for other nations:
China's ability to lead in the constant push to the rock-bottom price is wiping out manufacturing jobs throughout the world.

The world's most powerful companies are transferring proprietary technology to Chinese companies in the hopes of gaining access to China's huge domestic market.
  • Boeing (ticker: BA), with a 65% share of the Chinese market for passenger jets, has entered an "industrial partnership" in which it is helping Chinese companies grow into suppliers of key parts for its aircrafts.
  • GlaxoSmithKline (ticker: GSK) gave up its patent rights to a key component of its diabetes drug Avandia when its initial efforts to enforce them met a court challenge from Chinese competitors.
  • Foreign auto makers have yielded to government-mandated, joint-venture agreements with state companies, in which the Chinese gain equal ownership of the intellectual property.

Fishman believes that China intends to become the world's biggest economy. "If...the incomes of the Chinese come up to a mere half of those in the United States, a standard of living that the Chinese someday aspire to, China's economy would be two and a half times as large as America's," he states.

Yahoo! China Search Engine Chief Engineer Resigns

From Pacific Epoch:

"Yahoo! China (NASDAQ: YHOO) search engine chief engineer Li Zhao and several core technical staff members from Yahoo! China's search division resigned after Chinese New Year, reports China Business. Insiders said that the former employees will set up a new company to develop search technology. Li Zhao was a colleague of Yahoo! China president Zhou Hongyi's at Founder and 3721. Li and Zhou both graduated from Xi'an Jiaotong University. China Business said Yahoo! will invest tens of millions of US dollars in Yahoo! China's search business this year."

Sunday, March 06, 2005

Kobe Bryant Settles Civil Lawsuit

Here is the article:

"Kobe Bryant and the woman who accused him of rape can now begin rebuilding their lives, but they may never shake the lingering effects of their legal battles that generated sensational headlines around the world."

"A federal judge signed the order Thursday that officially dismisses the 20-year-old woman's civil lawsuit against the Los Angeles Lakers star. Terms were not given when attorneys announced Wednesday that a settlement had been reached."

"Legal experts said the settlement agreement probably spells out financial penalties for anyone involved who speaks publicly about the case or the agreement -- including the dollar amount paid."

"They're buying silence,'' said Mel Hewitt, a veteran plaintiff's attorney in Atlanta.

Can White-Collar Criminals Be Rehabilitated?

Here is an interesting article from the Associated Press about Martha Stewart and previous white-collar convicts:

"Martha Stewart's Claims That Prison Time Changed Her Follows Pattern of White-Collar Criminals"

"NEW YORK (AP) -- Martha Stewart took up the cause of prisoners' rights during her five months in prison and calls her time behind bars "life altering and life affirming." Other white collar criminals have proclaimed themselves equally transformed after emerging from prison. But are they really?"

"If you're changed, then let's see the action," said Fred Shapiro, a lawyer who served time for bank fraud in Philadelphia in the 1990s, and went back to prison for a separate episode of white-collar crime 10 years later. "Everyone says they've changed after they've left prison, but only time will tell."

Consolidation in Chinese Search Market

Here is a very interesting article from China Daily:

"Search engine service providers launched a new round of attacks in the fiercely competing market yesterday - moves which could close the final stage of consolidations. "

"The market consolidation is almost done and the positions of some leaders are well established, so naturally some smaller players would seek other means to put themselves under the spotlight."

"According to an iResearch report on the Chinese search engine market, the business grew to 1.2 billion yuan (US$145 million) in 2004 with a 74 per cent year-on-year growth rate."

"Baidu, Google and search services by Yahoo! China were the top three most popular search engines in 2004 with almost 85 per cent of the usage."

"He said new technologies, such as desktop search software by Zhongsou and My Search software by will bring some uncertainties to the competition in the market, but it will be very difficult for a new player to emerge just with new technologies."

Friday, March 04, 2005

Admitted Students Day

Many schools (including mine) are having an admitted student’s day this month. I never made it to the admitted student’s day last year. While I love to travel and probably would have come if my work schedule had permitted I am not sure how high the value of it is under the current format.

At least at my school admitted students day generally consists of a tour, speeches from different faculty members and students about the benefits of the school, sitting in on a few classes and some sort of dinner or reception.

Frankly I am not certain how much this would have helped me make a decision. I would not have understood much of what was going on in a law class last year. Maybe just being introduced to the Socratic Method would have been of some benefit I suppose. The faculty and students who spoke all were somewhat biased in the advantages of our school and talked about the many advantages of studying here while ignoring certain drawbacks.

What do I propose? Since most people can find a lot of information about the school clinics, library, resources, job placement statistics, etc. online what do admitted students really want to know? They want to know how comfortable they would feel living here for three years.

I think admitted students day should take students on a tour of the city to see if they would enjoy living here. They should be taken out to a sporting event or a bar so that they can get to know current students under more open and honest circumstances (alcohol induced). This will let the students figure out the social differences between different schools and allow them to see which school were more "cooperative" versus "cutthroat", and measure the stress level and general happiness of current students. This is just my opinion. Others may disagree.

More on Tuesday's Death Penalty Ruling

From the ABA Journal:

"Tuesday’s U.S. Supreme Court ruling that it is unconstitutional to execute juvenile offenders may not spell an end to capital punishment in this country anytime soon, some legal experts say."

"But it could lead to new constitutional challenges to the use of the death penalty on the basis of age, race, mental illness and other grounds."

"The court, in a 5-4 decision, held that the execution of juvenile offenders violates the Eighth Amendment ban on cruel and unusual punishment."

This is a very interesting article. I hope that the Supreme Court is soon presented with a case of a mentally ill person on death row and rule that unconstitutional also. Could this mark the beginning of the chipping away of the death penalty in the United States?

Thursday, March 03, 2005

Martha Stewart Released From Prison

From CNN:

"Next week marks the one-year anniversary of Stewart's conviction on felony charges related to a personal stock sale. Last summer she was sentenced to five months in prison and five months of home detention, followed by two years of probation."

"She could have stayed out of prison, possibly for good, if she had waited until a court ruled on her still-pending appeal. But she said she wanted to put the nearly three-year-old ordeal behind her, both for her sake and for that of her company, which has been bleeding money because of her legal woes."

"Stewart's house arrest is due to end in August. After that, she will be on probation for another two years."

I am thinking about shorting Martha Stewart Living Omnimedia. People are making too big of a deal about her release. Her company is not doing that well. It is unclear that she will be able to take over her company again unless she can make a deal with the SEC. People also have exaggerated the benefits of the K-Mart/Sears merger for Martha Stewart Living Omnimedia.

From their November 4th 10Q:

The following table sets forth the minimum guarantees as contained in our contract with Kmart Corporation:

Minimum Royalty Amounts ($ in millions)
1/31/02 $15.3
1/31/03 $40.4
1/31/04 $47.5
1/31/05 $49.0
1/31/06 $54.0
1/31/07 $59.0
1/31/08 $65.0

"We continue to expect that the minimum guaranteed royalty payments will exceed actual royalties earned from retail sales through January 31, 2008. For the contract years ending January 31, 2009 and 2010 (the extension years), the minimum guarantees will be substantially lower than in prior years. The specific computation is discussed in the paragraph below."

As you can see MSO will be benefiting from the minimum guaranteed royalty payments for quite some time. Therefore any additional Sears sales of MSO products will not help the MSO bottom line (unless sales unexpectedly go through the roof at Kmart and Sears).

I would NOT buy MSO at these prices. I am not making investment advice, only stating my opinion. Please do your own research.

Extension Of Sarbanes-Oxley Compliance Dates

New rule as announced by the SEC on March 2, 2005:

"Compliance Dates: The compliance dates are extended as follows: A company that is a non-accelerated filer, or foreign private issuer that files its annual reports on Form 20-F or Form 40-F, must begin to comply with these requirements for its first fiscal year ending on or after July 15, 2006."

Read the details here:

Complying with the Sarbanes-Oxley Act of 2002 can be very expensive particularly for smaller firms who do not have strong internal compliance personnel. This should be a relief to the firms affected by the extension (including some Chinese firms) as it will give them more time to shop around for a better price on compliance support or to hire additional internal staff to assist with Sarbanes-Oxley issues.

Another Great Day For Sina

As a SINA shareholder I am very happy this week. Today we gained another 12.35%. While I am very happy right now with my SINA gains, I think much of it is probably due to short covering and rumors about a possible merger. I have to wonder if Sina will correct in the short term if it turns out that there is no chance of a merger anytime soon. As a long-term investor in Sina I actually hope that stay independent. However if Sina goes much higher relative to the other China portals on the NASDAQ (NTES, SOHU and TOMO) without any news I may consider taking some profits in SINA and moving more money into TOMO prior to their earnings release. Right now I believe TOMO may present the best value of the Chinese portals.

Please not that I am currently long all of the Chinese portals I mentioned above:

Wednesday, March 02, 2005

TOM Online Announces 4Q Earnings Release Date

The date will be March 15th. I wish we did not have to wait so long after the release of most of the other Chinese Internet stocks. At least now we know when the release will be. I eagerly await the results. I am currently long TOMO.


Here is a very interesting article from Guardian Unlimited on Shanda their expansion plans under the leadership of Chen Tianquiao:,7369,1428449,00.html

"China's second-richest man, Chen Tianquiao, looks poised to become the country's leading new media player after staging the sector's first aggressive raid on a rival's shares.

In a stealthy swoop over the spring festival holiday, Mr Chen's online game company Shanda Interactive Entertainment bought a 19.5% stake in Sina Corp, China's leading internet news portal, for $196m (£102m). The move finally turned the tables on Sina, which had tried to buy Shanda in 2003.

The possibility of a takeover that would create China's biggest internet company with a combined value of $5bn, has sent shock waves through the new media sector, which analysts said is ripe for consolidation.

The raid also highlights the ambitions of Chen, who has made no secret of his desire to compete with the executive he most admires, Bill Gates.

Until recently, such aspirations looked unlikely to be realised. The 31-year-old Communist Party member listed Shanda in 2003. Its success in securing a peak domestic market of 2 million game players was built on its game Legend of Mir II, which was developed in South Korea. Last November, Chen told The Guardian that he had never travelled overseas.

Yet the acquisition of the stake in Sina, which operates China's most influential online news portal as well as the country's biggest mobile messaging service, was an international counter-attack that would have made the most cunning multinational executive proud.

After Sina's 2003 attempt to buy Shanda, Chen first tried to turn the tables last October with a friendly takeover offer. The Sina board, led by the politically influential French-educated chief executive Wang Yan, reportedly refused to meet him."

Although as a SINA shareholder I am not really excited to give up my shares at this time for what SNDA may offer in a merger, I have to admit that the joint firm would truly become a powerful force. We shall see what develops from here...

Tuesday, March 01, 2005

Juvenile Death Penalty Unconstitutional

From CNN:

"In a ruling that marked a change in "national standards," a divided Supreme Court Tuesday ruled that the execution of juvenile killers is unconstitutional. The 5-4 decision tosses out the death sentence of a Missouri man who was 17-years-old when he murdered a St. Louis area woman in 1993. Writing for the court, Justice Anthony Kennedy found the punishment was unconstitutionally cruel under the Eighth Amendment.

"When a juvenile commits a heinous crime, the State can exact forfeiture of some of the most basic liberties, but the State cannot extinguish his life and his potential to attain a mature understanding of his own humanity." Supporting Kennedy were justices John Paul Stevens, David Souter, Ruth Bader Ginsburg, and Stephen Breyer.

The ruling means the death sentences of some 70 death row inmates who were under 18 at the time of their crimes will be invalid. States in the future will not be allowed to seek the death penalty for minors."

I am very happy about this ruling, especially since the vote was so close. It seems like a logical progression from prior rulings making it unconstitutionalto give mentally retarded people the death penalty. I am sure the families of the 70 inmates on death row now (who were minors at the time of their offense) are happy too.

Great Day For NASDAQ Traded Chinese Internet Stocks

Hopefully a new uptrend has begun. Here is a recap of some of today's great performances for NASDAQ traded Chinese Internet Stocks:

SINA + 6.91%
SOHU + 4.91%
NTES + 4.28%
SNDA + 8.67%
TOMO + 3.57%
LTON + 4.86%
KONG + 8.83%
JOBS + 15.04%
CTRP + 3.09%
LONG + 5.50%
NCTY + 1.10%
HRAY + 1.68%

Interesting TOMO Rumor

This is just a rumor but it would make for an interesting combination:

From China Tech News:

"Rumor: Tom Online To Acquire Alibaba March 1, 2005
The Internet is rife with rumors that Tom Online will acquire, a B2B service provider. Tom Online's stock has not shot up dramatically after doing its initial public offering and it has been weak in competing with other portals. The company is in need of finding a new service to help itself both on the stock and revenue fronts. Alibaba, which has been hit by fierce competition from businesses like Taobao, 1pai and eBay Eachnet, is starving for external support, so perhaps a Tom Online acquisition will also give extra backing to Alibaba's future. Neither company has publicly confirmed or denied these rumors. "

It is not clear from this article but Alibaba owns Taobao. Taobao and 1Pai (Sina/Yahoo) both gained market share from Eachnet (Ebay) last year largely because they do not currently use fees like Ebay. Ebay plans to spend a lot of money in China this year to defend their position. Nevertheless Sina/Yahoo is a powerful rival with their large portal presence in China and a Tomo/Taobao joint venture would seem to make sense for the same reason. I hope the rumor is true as I am currently long TOMO.