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TheStreet Open House

The 5 Dumbest Things on Wall Street This Week: March 8

2.) Sohu's Sugar High

Seriously Sohu (SOHU - Get Report). You really should have played along with the whole leveraged buyout blather instead of being a buzzkill and squashing it.

The Chinese Internet portal repudiated a report in the South China Morning Post on Wednesday that said the company is talking to investment banks and private equity players about privatization. Sohu stock spiked 12% Tuesday on the buyout report, briefly exciting investors in Chinese stocks that had otherwise been having a particularly rough time of it. Shares of the company gave up nearly all those gains Wednesday once a company spokesperson flat-out denied the article.

"No such discussions are in progress or currently contemplated," confirmed Carol Yu, co-president and chief financial officer of Sohu.

Hey Yu! Who cares if the report was true or not? It doesn't matter. After all those ridiculous Chinese reverse merger scams nobody believes what they hear about Chinese stocks unless it comes from Carson "Muddy Waters" Block anyway. So why not let Sohu's investors have some fun, at least for a little while?

Honestly, it's not that we care so much about Sohu in particular. Heck, that stock is way too wild for us. A glance at the chart alone is enough to send a value investor into cardiac arrest.

Nevertheless, it's hard not to feel some sympathy for China investors after the battering they took from all sides last week. It started last Friday on the Mainland when the government raised restrictions on homebuyers to prevent a housing bubble. And the bad news continued in America on Sunday night when 60 Minutes did a segment on ghost cities in China, suggesting the Chinese authorities may be too late.

As a result of all this China news the U.S.-listed shares of companies like Xinyuan Real Estate (XIN) and China HGS Real Estate (HGSH) tumbled 11% and 9.3% respectively Monday.

Do us a solid, Sohu. The next time your name gets bandied about as a buyout candidate just go with the flow.

So what's it to Yu if the stock gets goosed a bit?

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IPXL $46.91 2.56%
JCP $7.83 2.62%
SOHU $53.58 -0.30%
TUES $16.32 -1.57%


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