Woes Continue for Chinese Internet Stocks

Source: Thinkstock
Whatever the cause of last Tuesday’s disruption of Internet access in China, the effects continue to be felt early Friday morning as stock prices in the country’s largest Internet stocks continue to slip. The government has set the blame for the massive disruption on unspecified hackers. China Internet watchdog says that it has conclusive evidence that the outage was caused by the “Great Firewall.”

Late Wednesday a U.S. Securities and Exchange Commission (SEC) administrative trial judge ruled that the Big Four U.S. accounting firms with joint ventures in China should be barred from working for any U.S.-listed Chinese company for six months. That probably caused more selling of the stocks on Thursday and remained a factor Friday.

Friday’s big loser shortly after the opening bell appears to be Qihoo 360 Technology Co. Ltd. (NYSE: QIHU), down about 6.4% to $87.30, in a 52-week range of $27.76 to $96.74. At least part of the drop is due to an announcement that Alibaba has denied rumors that it will be taking a stake in the company. Daily average share volume was about 2.9 million and nearly 600,000 shares traded in the first 20 minutes or so of the session.

Baidu Inc. (NASDAQ: BIDU), the Google of China, has dropped nearly $10 in the past two days. Shares were trading at $165.61 early Friday, and the 52-week range is $82.98 to $185.50. Early volume was already about one-third of the daily average of 3.7 million shares.

E-Commerce China Dangdang Inc. (NYSE: DANG), a smaller version of Amazon, is down 11% for the past two days. The 52-week range is $3.70 to $12.19. Trading was not particularly heavy Friday morning, but the shares were down another 3.2% at $9.57 after closing at $9.89 on Thursday.

SINA Corp. (NASDAQ: SINA) closed the past two days down 6% at $72.51 on Thursday. The stock traded as high as $89 just two weeks ago, and the 52-week range is $45.54 to $92.83. Early volume was fairly heavy, with about one-sixth of the daily average of nearly 3 million shares already changing hands. Ltd. (NYSE: WBAI) is the Chinese lotto play. Trading Friday morning at $37.68, the stock was down from $43.81 just two days earlier. The post-IPO range is $18.14 to $44.80. Volume was roughly one-third of the daily average of around 700,000 shares.

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