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Phoenix New Media Limited (FENG) - free report >>
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Here's Why Chinese Internet Stocks (WB, SINA, FENG) are Tumbling Today
On Thursday, shares of hot Chinese Internet stocks are tumbling in morning trading after government regulators ordered three major platforms to shutdown all video, audio, and streaming services.
China’s State Administration of Press, Publication, Radio, Film, and Television said that Weibo (WB - Free Report) , one of the biggest social media platforms in the country, or “China’s Twitter ,” was operating without the proper licensing, and publishing content that went against government regulations; regulators also alleged that Weibo was “propagating negative speech.”
As a result, shares of Weibo fell 10% soon after the opening bell, but are currently down about 8.6% in mid-morning trading.
Phoenix New Media (FENG - Free Report) , another company affected by the shutdown and owner of ifeng, has fallen over 2% so far today; video streaming site ACFUN was the other Internet platform ordered to stop operating.
The crackdown has affected other Chinese Internet stocks. SINA Corp. , which owns a majority stake in Weibo, is currently down 5.3%, while Momo Inc. , a mobile-based social networking platform, is down roughly 1.4%. Shares of YY Inc. (YY - Free Report) , too, have declined 2.3% today as well; YY is a leading online social entertainment platform.
Even Alibaba, which also owns a large stake in Weibo, slipped downward about 0.8%, though the company has now rebounded, and is currently up 0.59% in mid-morning trading.
It is unclear at this time if the shutdown is temporary or permanent, but the streaming ban is a reflection of China's continued control over its online content.
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