Qihoo fights back against Citron's report
By Chen Li |
November 3, 2011, Thursday
|
Print Edition
Print Edition
CHINA'S Internet firm Qihoo 360 Technology Co yesterday disputed a report by shortseller Citron Research which called it "the most overvalued and misunderstood Chinese Internet stock," causing its shares to fall by more than 10 percent in New York.
The report further said Qihoo's shares may dive to US$5 per share.
Qihoo closed 10.32 percent lower at US$18.12 on Tuesday, while the Dow Jones Industrial Average fell 2.5 percent.
Qihoo, the No. 3 Internet company in China as measured by active users, said in a statement yesterday that it strongly disagreed with the research report released by Citron early Tuesday since it contains numerous errors of fact and is riddled with unsupported speculations.
"Citron has made no effort to reach out and communicate directly with Qihoo's senior management," Qihoo said. "We believe the author of the story lacks a basic understanding of the Chinese Internet industry in general and Qihoo 360 in particular."
Citron, which has also slammed several Chinese overseas-listed firms, including Longtop Financial Technologies Ltd, over alleged accounting scandals, said in the report that it estimates Qihoo's share price may plunge over 75 percent below its current trading range to US$5 each. Citron alleged that Qihoo "intentionally" misrepresented its business to Wall Street on hopes of "sustaining exaggeratedly high market capitalization."
It shot down Qihoo's claim that it had "over 300 million active users," "80 percent penetration," and was "the 3rd largest Chinese internet company by active user base." Citron said more than 21 percent of Qihoo's revenues were actually derived from Google, primarily search queries.
Citron further claimed the Doubleclick adplanner showed that Qihoo's 360.cn website was the 21st most visited site in China and had a reach of only 10 percent.
The report further said Qihoo's shares may dive to US$5 per share.
Qihoo closed 10.32 percent lower at US$18.12 on Tuesday, while the Dow Jones Industrial Average fell 2.5 percent.
Qihoo, the No. 3 Internet company in China as measured by active users, said in a statement yesterday that it strongly disagreed with the research report released by Citron early Tuesday since it contains numerous errors of fact and is riddled with unsupported speculations.
"Citron has made no effort to reach out and communicate directly with Qihoo's senior management," Qihoo said. "We believe the author of the story lacks a basic understanding of the Chinese Internet industry in general and Qihoo 360 in particular."
Citron, which has also slammed several Chinese overseas-listed firms, including Longtop Financial Technologies Ltd, over alleged accounting scandals, said in the report that it estimates Qihoo's share price may plunge over 75 percent below its current trading range to US$5 each. Citron alleged that Qihoo "intentionally" misrepresented its business to Wall Street on hopes of "sustaining exaggeratedly high market capitalization."
It shot down Qihoo's claim that it had "over 300 million active users," "80 percent penetration," and was "the 3rd largest Chinese internet company by active user base." Citron said more than 21 percent of Qihoo's revenues were actually derived from Google, primarily search queries.
Citron further claimed the Doubleclick adplanner showed that Qihoo's 360.cn website was the 21st most visited site in China and had a reach of only 10 percent.
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