SINA lawsuit, honesty of SOHU?

**wonton** Wed Feb 16, 2005 9:41 pm

SINA lawsuit, honesty of SOHU?
...

**blast_investor** Wed Feb 16, 2005 11:59 pm

How that can affect SOHU fundamentally?

Of course, short term it may affect SOHU stock price up or down, and it is important information for traders.

But here we mainly discuss stocks based on value investing method, which pretty much ignores any short term up or down movement. Lawsuit is against another company, an unrelated issue.

**wonton** Thu Feb 17, 2005 12:07 am

...

**blast_investor** Thu Feb 17, 2005 12:39 am

I see. But using other companies's trouble to suspect another companies' honesty is not reasonable judgement in my opinion.

We know there are lots of cheaters in Chinese companies and in USA companies as well. It happend in Enron and Worldcom, it happened in many Chinese companies listed in Shanghai (I do not need mention, too many) and in oversees.

The latest confirmed big case was Singapore listed Chinese firm called China Aviation Corp.

My belief is that due to reality of current China and legal system in China, there is likely to have more cheating possibilities in Chinese firms than USA listed firms. It is likely.

However, we can not treat every firm in China as cheaters, that is too extreme. SOHU SINA and NTES etc are USA listed firm and they are subject to USA laws as well even though they are Chinese firms.

In my opinion, it is OK to invest in American firms, and it is OK to invest into China firms listed in USA. The cheating situations among regular Amercian companies are pretty bad too. That is one reason that it is so tough for average investors to make money in stock market, even with all Amercan Stocks of all-American companies. There are too many sharks out there. Value investing stock research or analysis must include integrity or honesty check as part of work.

By the way, traders may not care that much on integrity or honesty check, value investors must care. Integrity check and due diligence is most important espect of value investing reseach work, which can not be replaced by any software or computer automations. It mainly depends on analysts' skill or experience.

By the way, I have been negative on SINA's integrity long before, many quarters ago when Wall Street analyst (Piper Jayfry) Safa was touting SINA as best internet stock in China.

Now we had this SINA lawsuit and Safa immediately changed his view on SINA from postive to extremely negative. It is too late. Wall Street analyst job is supposed to detect dishonesty or integrity problem before other people, not after fact.

**blast_investor** Thu Feb 17, 2005 12:49 am

My opinion on this SINA lawsuit:

I welcome lawsuit on Chinese firms like SINA. Let US court make judgement on SINA. SINA is US listed firm and it must abide by US laws.

If SINA indeed did something wrong, it will be penalized and that will send strong signals to other Chinese firms, and it can protect US and overseas Chinese investors as well. If US court proves that SINA did not cheat, I will welcome and accept that too.