China YouTV Corp. (CYTV-OTC) is one stock that has been on a tear in recent days, yet no one really knows the company yet. CYTV shares are up threefold in the last few days and sit around $2.60 today. This is the first Chinese online video site listed in the US and this is the description: CnBoo.com is the online video site of HuaJu NetMedia, the Joint Venture partner of China YouTV. CnBoo.com was established in May, 2005 as one of the earliest video sharing sites in China. The online chat rooms are calling this one "the next YouTube, and in China too…"
The web site is a video viewing site and social networking site that allows users to create their own profiles, post videos, and comment on each other’s posts. It offers short-form videos that are predominantly user-generated or, in many cases, professionally produced videos that have been user "edited." Everyone can watch videos on CnBoo.com. People can see first-hand accounts of current events, find videos about their hobbies and interests, and discover the quirky and unusual. The company claims that CnBoo.com already has more than 1.2 million members and over 1 million pieces of original video shorts. So far it is being billed as the YouTube of China, sorry Google.
There is one question here that really needs to be addressed though, outside of the traditional OTC stock spin: How does this get around the Chinese censorship laws there? There has to be some issue here, even if the company claims it "monitors" the content per Chinese laws. The company’s website is also very basic and doesn’t exactly ooze "mega-video" AND this company in the joint venture was (partly) funded In MARCH 2007 with 2 deposits of 1 million RMB (about $130,000.00 at the time under today’s echange rates). Access the registration from March here, and you can probably assume that there will be some share sales if there haven’t been already.
Investors need to know that this one has stock promoters behind it because the emails have been sent around en-masse in a template that many other OTC stocks get put in. But hey, I don’t want to sound only negative on this sort of investment tool because sometimes letting the actual fundamentals get in the way of a great story is more costly than can be imagined. I am sure the fact that all the chat rooms are calling it "the next YouTube, and in China too" is going to keep the buzz going regardless of if this is a $2.80 stock, a $4.00 stock, or a $0.50 stock. After you have been around for a while, these all fit a boilerplate dujour and it is hard not to at least raise an eyebrow or two. But, once again, sometimes putting the fundamentals and financials in front of a big story makes a huge missed opportunity. That will be for you to decide.
Jon C. Ogg
March 22, 2007
Jon Ogg can be reached at email@example.com; he does not own securities in the companies he covers.