This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Sina's Message of Misfortune

Updated from Feb. 7

Sina's (SINA - Get Report) wireless phone business will take a dive in the first quarter, the Chinese Internet portal said Monday.

The news, which came as Sina announced mixed fourth-quarter results, sent the company's shares down 24% in premarket trading Tuesday.

The news came only a few hours after fellow Chinese portal company (SOHU - Get Report) disappointed investors with its own outlook. As is the case with's hobbled wireless phone business, Sina's warning illustrates the particular risks of investing in China, where government edicts and the policies of wireless carriers such as China Mobile (CHL) can suddenly impact business operations.

Sina's shares, which fell 5 cents to $27.35 in normal trading Monday, were recently $6.45 to $20.90 on Instinet.

In its earnings release issued Monday, Sina forecast that its "mobile value-added services" revenue targeted at wireless phone users will drop 20% to 30% from fourth-quarter levels.

That category of revenue amounted to $35.7 million, or 63%, of the $56.9 million in total revenue that Sina reported for the fourth quarter.

Those mobile services had grown 56% from the fourth quarter of 2003, and were up 14% from the third quarter of 2003.

Behind the pessimistic forecast are two different, major developments.

In late January, Sina said, the Chinese State Administration of Radio, Film and Television, the broadcasting regulator in China, told broadcasters that advertisements for wireless phone "fortune-telling" services are prohibited as of Monday, Sina said.

This ban, says Sina, will stop "almost all" of its current promotional efforts for its usage-based Short Message Service (SMS) products on radio and TV.

Separately, says Sina, China Mobile last month changed its billing process for another category of wireless services, Multimedia Messaging Service, and plans to migrate MMS onto another delivery platform. The MMS changes, says Sina, may result in a 30% to 50% reduction of MMS revenues.

The actions from the broadcast regulator and from China Mobile clearly threaten the wireless business's growth prospects. Sina says that "substantially all" of its revenue growth for mobile value-added services in the second half of 2004 came from either SMS products promoted through broadcast advertising or from MMS.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
NTES $169.43 2.70%
SOHU $52.98 -0.02%
SINA $51.01 1.27%
AAPL $118.03 -0.71%
FB $105.41 -0.31%


Chart of I:DJI
DOW 17,813.39 +1.20 0.01%
S&P 500 2,088.87 -0.27 -0.01%
NASDAQ 5,116.1430 +13.3350 0.26%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs