Send me real-time posts from this site at my email
Motley Fool

Why SINA Corporation Stock Dropped Today

What happened

Shares of SINA Corporation (NASDAQ: SINA) fell as much as 11.5% early Tuesday, then partially recovered to trade down 7.3% as of 1:15 p.m. EST despite the Chinese online media company reporting better-than-expected third-quarter results.

SINA's adjusted net revenue climbed 62% year over year to $443.1 million, which translated to adjusted net income (attributable to SINA) of $57.7 million, or $0.77 per share. Both the top and bottom lines exceeded investors' expectations for adjusted earnings of $0.75 per share on revenue of $406.5 million.

Image source: Sina.

So what

Driving SINA's top-line growth was a 56% increase in advertising revenue (to $364 million), primarily from SINA's stake in micro-blogging site Weibo. Adjusted non-advertising revenue also grew 98%, to $76.6 million, thanks to a combination of growth in Weibo membership fees, live broadcasting, and new revenue from SINA's online finance business.

So why the decline today? For one, note that SINA stock is still up nearly 70% so far in 2017, including a more-than-30% pop over the past six months thanks to two equally impressive quarterly reports in May and August. So it's not terribly surprising to see some investors taking profits off the table right now.

Now what

Even so, investors should know that the drop runs contrary to the quality of SINA's performance. Company chairman and CEO Charles Chao insisted they're "pleased" with their results, calling it "another strong quarter [...] with record revenues and operating profit."

I think SINA's long-term story remains intact, and today's decline should do little to deter patient investors from continuing to hold their shares.

10 stocks we like better than Sina
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Sina wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 6, 2017

Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends Sina and Weibo. The Motley Fool has a disclosure policy.

Popular posts