First let’s mark Oct 14 2009: Dow 10,000 2.0 (Yahoo Tech-ticker video below)
(did you notice the Yahoo ~~~ in the end, Yahoo became more goofy under Carol)
My topic today is IPO. I have not got much luck from IPO investing (to be more precise, speculating). My lessons are the following:
That’s exactly how I did with Shanda Games (Nasdaq:GAME) IPO today. Shanda is not new to me. I lost money on this one three years ago (see my old stock lesson here). I am not bitter about losing money either. Because after about 5 (6) years in US stock market, especially the roller coaster ride in the past year, I started trying to get emotion of making/losing money out of the stock game, I am not perfect yet but making progress.
One lesson I should learn is trust my own gut. The spin off of Shanda Games seems odd to me, because from business point of view, typically companies spin off non-core business, like Sohu/Changyou (Nasdaq:CYOU), EMC/VMWare (NYSE:VMW). The Shanda spin off looks like a secondary offering of Shanda Entertainment itself, because Online Game is its core business. Although Shanda (Nasdaq:SNDA) had committed itself to other ventures, including at one point use a sloan like “become China’s own Disney”. It has not make real inroad in other online business yet. Except made some money buying and selling Sina stocks couple years ago.
(Update Nov 20) Grus had a good post on trader818 explaining the online games and its competitive nature. So I can shut up.
(Original) I have traded the three old horsemen among Chinese online game companies 2 years ago(unfortunately, lost money on all three): Shanda (SNDA), NetEase (NTES) and the9 (NCTY). I paid attention to them from time to time, and I think recent developments in those 3 companies are interesting, especially from business point of view.
First, the good news from Shanda. Two years ago SNDA stock is in a downward trend, because its main revenue source: lineage II was getting old. Since then SNDA did a few things: it sold Sina stock and took a big gain; it changed its business model from making money from subscription to making money from selling stuffs used in game; it also acted more like a VC, I mean it bought some popular game in its early stage, then leverage its distribution network to make money.
NetEase, the old game (westward series) are really getting old, the new in-house games are not taking the slack from westward. Other effects such as web search is too little too late. In my mind, Mr. Ding Lei was very lucky in the past, in terms get into the right field in the right time (email service, mobile value added service, and online game). Will he be lucky all the time?
A thousand words 