Not sure what is going on in the Chinese internet complex, but even the best of the best such as Baidu (BIDU) are getting obliterated. Aside from this group, a lot of the momo stocks are not participating in the rally (GMCR, WYNN, FOSL smashed) - very strange action today. One wonders if a momo hedge fund is being blown up somewhere. Also some rumors on twitter of a fraud investigation – seems strange for a company like Baidu to be subject to something along those lines.
Rumors DOJ Investigating Chinese Accounting Claims of Fraud in $BIDU and $SINA
This is not Joe Schmoe’s $200M market cap Chinese reverse merger…. I’d be grabbing me some BIDU action at least for a trade here at $108-$109. A move back to just $120 gets a nice 9% return. (edit: 3% stop loss from entry point in place of course) =)
EDIT 11:35 AM – here is some more detail on the so called “DOJ investigation” (source: Barron’s)
Shares of Chinese search engine Baidu (BIDU) are down $10.82, or almost 9%, at $110.60 as reports circulate the U.S. Department of Justice is assisting a Securities & Exchange Commission probe of “accounting irregularities” among U.S.-listed Chinese firms.
The Guardian’s Andrea Shalal-Esa and Sarah Lynch this morning quote SEC enforcement chief Robert Khuzami as stating parts of the Justice Department are “actively engaged” in looking at the practices, along with the SEC and the FBI, which have been looking into the matter for a year now.
No charges have been brought, the authors note, and the SEC and FBI are struggling just to get ahold of the requisite paperwork from the companies.
Some examples of the better thought of Chinese names: