Youku is the Chinese "youtube" and recently decided to go public. Youku is probably the most popular video site in China, and still has huge prospects for growth. A more innovative site like Youku is predicted to rapidly grow, as China "catches up to the times". Because it has been public for just 2 days, specific figures are still hard to determine. Though from the specifics that can be determined, Youku is looking like a goldmine for investors. Revenues are high, clocking in at a whopping $35.1 Million in their last nine months, and are planning to reach 50 million for the year. They have reported, 203 million different monthly visitors to their site. Obviously as a company, this is impressive. This isn't a value stock, shares will be trading at over 70 times revenues, which is high, but it is a very impressive growth company. The IPO was originally $12.80, and quickly rose to $25.57 on its first day. After day one it was at just about $32 dollars, and now just hit $42.50. This growth is outrageous, almost never seen before.
So the more "macro" question is, was this growth due to the location of the company (china), and if so, will foreign companies grow at a faster rate then their American counterparts.
I personally love this site, and recommend it for watching tv shows, so when I heard it was going public I was interested. We saw it at the $26 and were going to invest, but as you may know, the trading site is down. (Which really stinks!) As was brought up in the seminar, when a stock has doubled, it is probably time to pull out. It would be rough to maintain such a steep growth, if any, so we will probably no longer invest.
I also looked into Youku and would agree with you, but we'd both be wrong. I personally have used Youku before, but I don't have much respect for it. Many of their videos are illegally shared and once China snaps down on their videos (censorship), Youku can go on a steep downward slope. Searching for opinions of professional investors, I found one article calling it 'The worst stock in the world'. When you mention a $35 million dollar profit, you haven't taken in account the $24-25 million costs. All this, however, could be irrelevant in the short run 'wild ride' analysts say it's on. A quick in and out day trading could be a great opportunity right now and I might even try to make a quick buck. It is all risk, but I think calling this a growth company is wrong.
ReplyDelete[I just wrote a long-winded response but got an error when I submitted, so forgive me if my previous response somehow appears along with this comment.]I completely agree with Saagar, growth investors would have to be either incredibly gutsy or incredibly insane to invest in Youku. Youku's crash has already begun with stocks plummeting over 12% at the end of this week. But the real shocker can be found in their business statistics. Despite being based in a country as massive as China, Youku stands no chance against the internet giant known as Youtube.
ReplyDeleteObserve this comparison I generated via WolframAlpha. http://www.wolframalpha.com/input/?i=youku+youtube
The last chart is by far the most interesting. Despite Youku being online over a year before Youtube, its user statistics pale in comparison. Youtube gets on average 14 times as many daily visitors as Youku (370million vs 26million) and a whopping 38.5 times as many page views (basically the same as video views) as Youku. Breaking this down by individual viewers, the results are still quite staggering. The much larger Youtube userbase watches on average 13 videos per visitor, compared to just 5 videos per person on Youku. If you take a look at their respective subdomains, you will be startled to find that Youtube's Japanese and UK websites both individually surpass Youku's international domain in visitors. Need I say more? Youku, though an ambitious business for an internet company in China, will never see the popularity that Youtube enjoys. The investor hivemind knows this, and we can all conclude that Youku is nothing but a quick turnover stock for most of the investors involved.