Alibaba news heightens Chinese net stocks’ pain


It looks like a very high-profile dispute over corporate governance issues is not what momentum-sensitive stocks need when they already look more than a little expensive. Yahoo ( YHOO , quote ) owns 40% of ( ALBCF , quote ) -- effectively a Chinese eBay ( EBAY , quote ) analog. YHOO raised some eyebrows earlier this week by telling shareholders that its stake in online payment venture Alipay had been transferred to an ALBCF affiliate without its consent. ALBCF fired back last night denying the claim, saying instead that YHOO had known about the transaction and its board had signed off as long ago as 2009. The truth has yet to be conclusively determined, but for now, all we really know is that this dispute is now not just raising eyebrows but real investor concerns about the integrity of Chinese financial disclosures. Is anything credible? Once you start questioning management transparency, things get very slippery very fast. The alternative is that YHOO for some reason did not recall its own boardroom discussions, which in turn raises the same question of credibility -- albeit more narrowly focused on one of the global Web's giants. Either way, the Chinese Web group is tanking today. Starting with YHOO down 6.6%, we have SINA ( quote ) down 4.6% and BIDU ( quote ) down 2.9%. There is massive pain here. SINA is now down 28% from its highs -- posted just a month ago. Recent IPO Renren ( RENN , quote ) is down 2.3% and YOKU ( quote ) and SOHU ( quote ) are flat.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , International , Stocks

Referenced Stocks: ALBCF , BIDU , RENN , SOHU , YHOO

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