Code JDMBA2b: July 2005

Thursday, July 28, 2005

Baidu IPO Coming Soon!

Baidu (BIDU is the proposed ticker) is among the most hyped IPOs so far this year. For more information on Baidu and the upcoming IPO read my new blog:
http://jdmba.blogspot.com/2005/07/baidu-ipo-hype.html

Comments on GRVY Trading Activity Today

Here is my impression of the Gravity news and resulting trading activity today: As a backdrop please note that GRVY:

  1. Has a relatively low float (number of shares available to trade) which increases volatility.
  2. Is not covered by many professional analysts or professional traders (I believe they are only covered by one analyst) which may imply a decreased efficiency of the market price equaling the “true value” of the shares.
  3. Relatively low institutional ownership.
  4. Has a high beta. Beta is the sensitivity of a stock's returns to the returns on some market index (e.g., S&P 500). For more on beta look here: http://invest-faq.com/articles/analy-beta.html

Stock price reaction to news about companies with a low float, little analyst or professional trader coverage, low institutional ownership and a high beta is often exaggerated. All of the factors listed above can increase volatility. On bad news such stocks will tend to take a short term drop more dramatic than fundamentally warranted. On good news they tend to rise in the short run more than they should. Supply/demand issues will exaggerate these gains or losses when there is a low supply (GRVY has a low float) or when trading volume is much higher than normal (such as today).

Read more on my new blog: http://jdmba.blogspot.com/2005/07/gravity-trading-activity-today.html

Sunday, July 24, 2005

Please Update Your Links!

If your webpage has a link to my old blog:
http://jdmba2b.blogspot.com,
please update your links to reflect my new blog address:
http://jdmba.blogspot.com

It appears that I am still getting quite a bit of traffic to my old blog that I would like to see coming to my new blog instead. Please help me out by making sure that your links to my blog contain my new web address.

For any of my readers who have a blog that may be of interest to my readers please let me know (my email address can be found in my profile) and I will be happy to link to your blog as well! Please come back and visit my new blog soon as there will be many Chinese ADRs reporting earnings in the next few weeks and I am eager to share my opinions.

Thursday, July 21, 2005

Yuan Valuation Adjustment

Today the Chinese government announced a change to the exchange rate of 8.11 yuan to the dollar from 8.277 yuan to the dollar where it has been fixed for many years. Here is my opinion on the news in terms of politics, international trade, outsourcing and Chinese ADRs:

Read more about this topic and much more on my new blog:
http://jdmba.blogspot.com

If your webpage has a link to my old blog, please update your links to reflect my new blog address:
http://jdmba.blogspot.com

Wednesday, July 20, 2005

Conflicting Reports about CHL Revenue Sharing Changes

Will China Mobile (CHL) be changing the revenue split for NTES and SOHU? Currently they both get 85% and China Mobile gets 15%. The news of the revenue sharing models changing for some companies is not new:
http://tinyurl.com/8lczh

What is new are reports from iResearch that NTES and SOHU may be among those who are affected:
http://tinyurl.com/8avnk

Read more about this topic and much more on my new blog:
http://jdmba.blogspot.com

If your webpage has a link to my old blog, please update your links to reflect my new blog address:
http://jdmba.blogspot.com

Sunday, July 17, 2005

SIFY Earnings Preview

I am eagerly awaiting SIFY's 1Q (Yes I said first quarter. SIFY's calendar year ends March 31st) earnings release Tuesday morning:
http://biz.yahoo.com/bw/050715/155214.html?.v=1

I do not have any reason to expect that SIFY did much better or worse than current analyst expectations of a 4 cent loss per share:
http://finance.yahoo.com/q/ae?s=SIFY

I am much more interested in SIFY's future guidance. It is without question that SIFY management has made a number of large mistakes since their initial IPO during the internet boom. They overspent millions of dollars buying various Indian websites that are still worth only a fraction of the initial purchase price. Today SIFY is trading at a very reasonable valuation and has good prospects going forward assuming they can properly execute. Continued on my new blog............

Read my opinion of SIFY's prospects and what to look for on the conference call on my new blog:
http://jdmba.blogspot.com

If your webpage has a link to my old blog, please update your links to reflect my new blog address:

http://jdmba.blogspot.com

Friday, July 15, 2005

Casual Gaming Market in China

SOHU just announced they will launch a new casual gaming platform next Monday, July 18th. Here is the story as reported by Pacific Epoch:
http://tinyurl.com/bkds2

Netease recently launched a casual gaming portal as well which is now in beta testing. Now most of the major publicly traded Chinese portals (SINA, SOHU, NTES, TOMO) and gaming companies (SNDA, NCTY) are offering casual games or will be soon. Shanda and Tencent are the clear leaders in casual gaming at the moment. I believe Sina is doing pretty well also. Netease is obviously doing well in MMORPG games so it is likely that they can leverage some of that success to become a major player in casual gaming soon enough. As demonstrated recently by Shanda's rapidly accelerating casual gaming revenue it is an important and growing area. Competition will increase as more players enter the market. Many WVAS players will be or already are competing in the casual gaming market as well.

More about the Chinese casual gaming business on my new blog:
http://jdmba.blogspot.com

If your webpage has a link to my old blog, please update your links to reflect my new blog address:
http://jdmba.blogspot.com

Thank you!

Wednesday, July 13, 2005

Upcoming Baidu IPO

Goldman Sachs, Credit Suisse First Boston and Piper Jaffray are the underwriters. Baidu plans to raise up to US$80 million with the IPO. Based on recent revenue, profits and risk factors I do not think BIDU deserves a market cap greater than any of the three major Chinese portals (SINA, SOHU, NTES) right now. I will wait until after the IPO to evaluate if I am interested in buying BIDU at current market prices.

Read more about Baidu on my new blog http://jdmba.blogspot.com

If your webpage has a link to my old blog, please update your links to reflect my new blog address:
http://jdmba.blogspot.com

Thank you!

Tuesday, July 12, 2005

Mobile Gaming Market in China

The mobile gaming market is still in its infancy, although I think it will eventually become one of the worlds largest just like online gaming in China. Of the publically traded NASDAQ firms I think SNDA, TOMO, and KONG are best positioned for future market growth as of this moment.

Continue reading on my new blog:
http://jdmba.blogspot.com/2005/07/mobile-gaming-market-in-china.html

p.s. Those of you using RSS feeds and those of you who have linked to my page, please start using my new blog address: http://jdmba.blogspot.com

Thank you!

Monday, July 11, 2005

Business Opportunities in China

For my readers who have an interest in investing in China the following teleconference this Thursday at 8:30PM Eastern time should be very interesting....

To continue reading please visit my new blog:
http://jdmba.blogspot.com/2005/07/business-opportunities-in-china.html

Sunday, July 10, 2005

New WVAS Revenue Sharing Model at China Mobile

As reported last week, China Mobile (CHL) has made some major changes to its WVAS revenue sharing model. Historically the service providers took 85% and China Mobile took 15%. With the new changes the service providers will take 85% going forward only if they do all of the marketing and customer service related to the WVAS product. China Mobile will take 30% or 50% instead of 15% depending on the amount of marketing and customer service responsibility they take on with regard to the service provides WVAS product.

Continue reading at my new blog:
http://jdmba.blogspot.com/2005/07/new-china-mobile-wvas-revenue-sharing.html

Saturday, July 09, 2005

eBay Finally Launches Paypal in China

Read more about the Paypal launch on my new blog:
http://jdmba.blogspot.com

Wednesday, July 06, 2005

SWOT Analysis of WZEN

Webzen (WZEN) is currently one of my favorite holdings in the Asian online gaming sector. While I believe others may be much better positioned in the key Chinese market and have executed much better than WZEN over the last few years (such as NTES another one of my key holdings), I think that WZEN is trading at far to low a valuation to resist.

Applying a standard SWOT analysis to WZEN:

Read more here....
http://jdmba.blogspot.com/2005/07/my-opinion-of-webzen.html

Friday, July 01, 2005

My New Blog

At some point I plan on replacing http://jdmba2b.blogspot.com with http://jdmba.blogspot.com since I see the later as being a more desirable domain name. Please be patient with me as I move content onto this new site. Thank you!