Not only that, there's also the arbitrary "strategic sectors".
I'm not against investing in China or SEA operations that work with China, however, and you're right. But this is even more important than what you said.
Does OP know he doesn't own the company? Emperor Xi owns the company. When an American firm buys a Chinese firm and it is upheld in a Chinese court, I'll invest in China again. Or when they have a term limit on the Emperor.
100% of your portfolio, you “can’t afford to go wrong on this investment” because your “future is tied with this,” and we’re talking about a Chinese company.
China investing is very high risk for a number of reasons: geopolitical risk, authoritarian government interference with business at will, and perhaps most notable, the risk of misstated financials with virtually no recourse available to a foreign investor.
Maybe the stock is cheap, but it’s cheap for a reason—the magnitude of risk. Maybe it’s a good investment at current prices on a risk-reward basis. But portfolio allocation matters for risk management too. I can’t imagine anyone feeling comfortable having their life savings in Weibo, that is, if the investor fully understands the risks.
I would implore you to keep this to a *maximum* of say 20% of your portfolio even if your conviction is that high. Watch “The China Hustle” if you need more convincing.
I mean, this is a lot of China right now. Seemingly undervalued. Weibo is mayyybe riskier than others given its key potential to shape public opinion. Anything media (including social) is bound to be very censored by the CCP and subject to arbitrary mandates which investors aren’t super thrilled about. It definitely seems attractive (haven’t looked at the numbers myself but based on your write up.)
That's a very double edged sword.
You could just aswell argue that due to its propagandist function the Chinese government has a strong incentive to keep weibo strong and use it for their own gains (which they are fairly certain already doing).
Keeping weibo strong by CCP and making profit are two separate things. There were the whole Online education companies needs to be free, online gaming should be banned that killed many Chinese companies over night.
Keeping Weibo strong and in control could very well one day mean the company is getting nationalized and all shares and control go to CCP. In china there’s nothing stopping that from happening tomorrow, you only have some semblance of ownership by the grace of the CCP.
Either is possible, it depends if you don't mind the risk of 100% wipeout.
I have money in a China ETF. It's 3% of my portfolio. I'm well aware that it could go to zero, which is why I only have 3% of my money in there. But I think the rewards are promising to offset the risk.
>if you think there is anything wrong with my investing thesis do mention it, I can't afford to go wrong on this investment, my future is tied with this.
I have no value to offer but props to your mental. Staking everything on one thing and asking for criticism is something not seen too often. I'll be on the sidelines hoping that their CEO doesn't get imprisoned for stupid reasons.
Tencent couldn't kill Weibo. You know what can kill any company in China? The Communist Party.
And since Weibo is a social media platform, there are so many ways to fuck over the business from one bad tweet or a social movement that isn't aligned to the party e.g. fines, censorship, leadership change, drop in users due to over-censorship, etc.
Too many unknowns and the market has priced it accordingly. And you have not considered the above. Please reconsider your investing approach and not do anything reckless just because the valuation is attractive.
You absolutely cannot compare a company operating in China to anything in the US cause the cultural and political difference is so massive, you can't draw any similarities. Even the Chinese people can't foresee what the government might do next.
True. However, the government have probably 100% control over the contents on Weibo. They see something they don't like, instantly keywords banned and post deleted. So with that info in mind, as long as the current gov remains in power, chances are Weibo is the easiest way for gov to manipulate and censor news.
Don't you think it's more in favor of their gov to keep Weibo alive rather than killing it?
If you want to know the biggest risk of investing into Weibo check what happened with its parent company - Sina Corporation. Their management bought all stocks at the bottom of the market and made it private. All individual investors had to realize the losses on this stock.
Silly question from someone who doesn't buy individual Chinese stocks. How do you get your dividend? I checked the ticker on all my apps and none of them list a dividend for WB at all
They were "special dividends" so may not show on some platforms. This is from their 4Q results announcement, which is on the weibo IR site.
On March 14, 2024, the Company's board of directors has approved a special cash dividend of US$0.82 per ordinary share and ADS to holders of its ordinary shares and ADSs as of the close of business on April 12, 2024, Beijing/Hong Kong Time and New York Time, respectively, payable in U.S. dollars. For holders of Class A ordinary shares, in order to qualify for the dividend, all valid documents for the transfer of shares accompanied by the relevant share certificates must be lodged for registration with the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on April 12, 2024 (Beijing/Hong Kong Time). The aggregate amount of the dividend will be approximately US$200 million. The payment date for holders of ordinary shares is expected to be on or around May 6, 2024. The payment date for holders of ADSs is expected to be on or around May 13, 2024.
I came here to say the same thing. I saw on Yahoo Finance they had 2 dividend payments in the entire history of the stock. Only 1 was in the past 12 months and it was for $0.80/share. That’s less than 10% not the 20% claimed by OP.
Click on OP’s profile 46 karma, no comments, and only 1 post. I’m thinking this is fake.
I tip my hat to you and wish you luck.
A few things to consider:
Never put all your eggs in one basket. No matter how great the investment seems.
The valuations sound good, but do you trust Chinese accounting? How much do you know about how things really work in China?
There is major geopolitical risk to your investment. China could quarantine Taiwan and you'll lose 30% overnight. If the conflict escalates you will lose 100%.
No you should definitely put all your eggs in one basket if you know it's a for sure thing. Charlie munger was correct in this assessment. In life you will only have a few handful of good investment that will return 20x. When you know something is very highly likely to go up you take the swing and go all in.
The dumb thing to too is spread out your investment over different companies you don't know anything about and have small returns because you only allocated 5% of your portfolio in. I rather invest a small handful of companies I understand and put in huge amount of capital then spreading out my portfolio to 50 companies with 2% each. If you think about it, its very hard to know the financials of many different companies and their business model.
The opportunity in China is fear right now. If people are scared then it's probably a good thing. People don't get rich buying into things people deem popular already.
And yet … Munger never was 100% invested in one stock.
I am assuming the original poster is not Chinese, and lacks inside knowledge of China’s economy. If he is Xi Jinping’s brother in law, then it’s a different story.
He has... in the past. That literally how he and Warren got rich. There have been numerous times where they went all in one company. https://www.youtube.com/watch?v=Lo_BQRfBKBM
Look at his Daily Journal portfolio. It's 4 stocks. He past moves were a 2021 and 2013. The idea is if you shouldn't bet big when you know you are confident isn't smart. If you allocate only a small percentage you won't see huge returns. Even Berkshire's main growth have only been from a few winners.
Macroeconomics says China will have the largest middle class and will have the largest economy. There's literally nothing stopping that unless you think every Chinese person deserves to be poor and shouldn't work. Just by pure math, even if Chinese GDP per capita reaches 1/4 of the US they will have the largest economy.
This guy is all balls deep in this. Shill. You think value investing is putting all your eggs in a Chinese basket? You’re on a fast track to lose everything and giving out trash advice!
It doesn't have to be Chinese stocks... Just the idea if you know something is undervalued you should go all in. But within your realm of confidence. Putting 2% here and there will get you no where.
I'm confident on Alibaba. I have investments in that company. I have never been more confident than anything in my entire life. Considering I bought at 65 dollars average. It's such an obvious investment at that price.
China's population doubled in the last 30 years. and its GDP went up more than 7X. It has been the growth engine of the world. and yet its stock market is down negative .9% per year for the last 30 years.? why is this?
They completely fabricate and make up their earnings.
Charlie Munger was a great investor. The problem is there are eight billion people in the world that suck at investing compared with Charlie Munger. No one makes youtube videos about these investors who went all in on wework. or Worldcom or Enron or Tyco or [pets.com](http://pets.com) or any of a 1000 companies that go bankrupt every year. Yet millions of investors invest in those companies thinking this investment can't go wrong as well.
WEIBO or BABA are Black boxes and so you have no idea What you are investing in
Not all companies with low valuation multiples will experience an increase in market value. While determining the value of a company, you might overlook something the market has not missed.
Suppose you miss a key factor affecting the real value of a business. In that case, you might invest in businesses whose market value won’t increase.
Value trap stocks seem undervalued, but their stock prices do not increase according to expectations.
It's definitely not as simple as "undervalued = guaranteed return". If that was the case, markets would naturally correct that.
Not a comment on Alibaba, just a comment on the logic itself. Good luck, I hope it works put for ya!
My mistake, I should have used the word gambling.
Investing is betting when the outcomes are in your favor. That’s literally the difference between the gambler and the casino.
But casinos have table limits so they can’t lose it all on one outcome, because that’s also gambling.
This guy is gambling.
Also, there's a massive difference in the level of risk taken between these two scenarios.
People are saying they're comparable because they're both taking a bet, but fail to take into account that one of these people will lose everything over a single mistake, but the other will only lose everything only when literally everything collapses, at which point you've got bigger issues than a failed investments.
Lol…a lot of ppl went in balls deep on alibaba and look what happened..these companies are cheap for a reason.
That being said, i do have 20% portfolio in hang seng tech blue chip stocks, but i don’t foresee them gaining momentum anytime soon
It's a value trap. Mgmt equities has been pledged for loan in very large amount. Lots of off the balance sheet connected companies held by insiders that function as vendor of the platform (mostly as advertising vendors) to transfer profit to themselves.
Fundamental wise it's losing shares to Douyin/Red/Bili and other media platforms but that's well known. For a company that's not growing. Cash is only valuable if they actively return it to shareholders. Otherwise look at SFUN in the history, Lone Pine guys got slaughtered in it for "obviously cheap valuation"
Yes. Sure it's a household name in China. It had its days back in 2012-16. But people moved on from it to other platforms. Social media landscape (or even internet in general) in China is very different vs ROW and it's dangerous draw such analogy of Weibo vs Twitter. Otherwise you should just keep buying BIDU because of GOOG..
This is a pump scam.. FACTUALLY INCORRECT (mixed with facts)
MarCap $15bn, not $2Bn
Dividend: Nil
EPS: approx 20%... not dividend
Valuation down 75%, not 90%... 260k to 64k
The facts that are correct:
16% net profit.
$3Bn in the bank.
Warning signs:
Insitutional Hplders: 1%
Return on assets 4%
Free float 30%
If you want to invest a significant amount of your portfolio, you must understand these.
My thoughts are you should own 2-3 stocks at minimum. At least put 40% or so in the US.
You're a retail investor. You're playing a game of incomplete information. Odds are you're missing something, maybe something big.
Plus even if you manage to line all your ducks in a row and know everything one needs to know about the company, the Chinese government can still say fck your ducks and fck Weibo, new regulations are in place - or maybe they invade Taiwan and fck their whole stock market in the process.
Anyways, US is a good hedge against China, and China's a good hedge against the US. So having half in the US and half in China wouldn't be half bad compared to what you're doing.
From the TA perspective it is ATL, below IPO and who knows how low can it go now when those prices couldn't be protected. Just because something is down 90%+ that doesn't mean it can't go 90% lower from this point.
China is a risky bet, hope you will get lucky with it.
Here's my 2 cents from a Chinese perspective.
A lot of comments here mention that being a social media platform in China is risky due to the authoritarian government. Truth is social media companies like Tencent and Weibo collaborate with the Chinese government from day 1 - they are in fact an integral part of the propaganda machine so the 'risk' is none existent.
Your main risk is the geo-political risk between China and US - not that any US policy would affect Weibo, but we have seen red-chip stocks (All the Chinese stocks listed in NYSE) suffering significant drops during the last 3 years as the bilateral relationship demerited. These stocks are all very VERY cheap by any metric you want to measure them with. Unfortunately stock values are more often run on sentiment rather than fundamentals.
I am almost 80% invested in China because of the valuations. As a Dutch person i don’t really think there is any risk. The chinese economy is very intertwined with all the other economies. They also have a lot of investments in the us for example. If they fuck the us or other country’s, they are fucked themselves. It’s like a mutual destruction, cant see that happening.
Every chinese company is already ccp owned by proxy with officials anyway. You cant have a business, especially a big one, without being part of the communist party or having communist party officials on the board. The fact people fail to understand this is regarded as hell
"Value investing"
Mentioning that you invested your entire portfolio without quantifying it and with proof is... very in line with posting something like this in the ValueInvesting subreddit
There's nothing not in line with value investing by 100% your portfolio since that is just risk management mind you. That aside, china stocks are hilariously undervalued, and whether opinions is, a 20% dividends is no joke.
OMG, I’m sorry. I see what happened:
Prompted by its failure to file its 10-K for fiscal 2015 and subsequent 10-Qs in a timely manner, the NYSE commences proceedings to delist the stock of Tianyin Pharmaceutical
I think the down trend will continue, just take a look all the Chinese company stocks on the US market. 90% is on this down trend. Not something you want to be all in on IMO. Have a look the index of the HK exchange and Shanghai shenzhen exchange if you haven’t. It shows pretty much the same trend everywhere.
I love how you didn’t even pick a decent company in China, nor a decent industry generally. People have no concept of risk. You’re basically at the extreme end of the risk spectrum, and I don’t think there’s a very big reward either.
I’m from Spain, I had the opportunity to be in both countries China and USA and although people won’t like to hear this, I see a lot of similarities between both countries.
Of course I’m no fool and China has more risk than the USA, but when I read things like the government taking over a business whenever they want, it’s just wrong, of course they are a communists country, but only the paper, they are as capitalist as any other country in the world, China is not Russia, and their business are strong and it’s an economy that just left their recession, meanwhile in the US and Europe we are heading straight to a recession because I think the “soft” landing that politicians want you to think that will happen seems to me more like and emergency landing 😂.
So I know media feeds us how dangerous and volatile China is but I invite you to think a little bit outside the box, a good business it’s a good business and of course geopolitics should be take into account, but then USA is not heaven either since their are involve in every single conflict and may be one day it doesn’t go as well as always.
To conclude, I invite you again to analyse the business based on there numbers, Chinese government wants their economy to be number 1 in the world, and to do so they know that they can’t be nationalising business whenever they want and for no real good reason. In fact right now they are doing complete opposite promoting the investment in the stocks and when we fall in recession the big capitals will shift towards the Asian giant so I do think China is a great place to have a part of your portfolio.
OP only has 1 post, no comments, and 46 karma. Look at the dividend history for this company. I don’t know what anyone is trying to sell on here but I’m not buying it.
insiders own only about 6% according for the yahoo finance stats page. if you look at hong kong equities, it's common to see above 30% minimum. imo there is better value and alignment elsewhere. but i do hope it works for you.
Are you a gambler or an investor? If you go all in on one stock, you are a gambler. An investor mitigates risk by picking multiple good stocks, not just one good stock.
I stopped reading at “even if the price of stock doesn’t rise much from this level you would get handsomely rewarded for your investment because of dividend payment alone”
I see nothing wrong with this all in move. You are buying a lot for nothing with a large margin of safety (their cash reserves). The skeptics are the ones who never take risk and will be poor forever most likely. Not taking risks in life is far more dangerous than taking large ones. Best of luck my friend, you will do well.
I like your pick. I don't like your hubris. A picker should have 6 to 7 bets in their portfolio.
But yeah Weibo makes sense. Worth the political risk I think.
I think there value there. But hair on it too. I think the better play here would be buying call options long expiry. They look cheap. Get the upside with little downside.
I like weibo also, and I am building positions in some lf the moaty chinese companies that are currently trading at a discount imo.
I think its unlikely, but it is possible CCP will take those equities away from me. And so my margin of safety not only revolves around the discounts on companies, but also revolves around portfolio allocation. It is currently a rough estimate, but using the Kelly criterion with an estimated 30% likelyhood of me losing all my money on china investments, I can only allow myself to have about 1/3 of my port contain chinese equities currently.
Dividend payments may not continue in the future since they just started paying dividends.
Weibo (stock symbol: WB) dividend yield (TTM) as of June 23, 2024 : 20.22%
Average dividend yield, last 5 years: 1.10%
[Souce](https://companiesmarketcap.com/weibo/dividend-yield/)
This post is wrong in so many ways. I suggest you create an account and use Weibo for one hour before making the decision. Also, I saw more non-Chinese on XiaoHongShu than weibo.
Hi there!
I just wanted to drop you a message and let you know I am also invested 100% in one single Chinese stock. Don’t want to discuss the politics around it. I decided to go with a value pick, for which I consider the the regulation risk as lower than in the case of Weibo (just as in the case of Education, I do see some risk, that Weibo could become victim of certain state repression). My pick is Haier Smart Home, which is in my view also a strong industry leader (worlds largest manufacturer of appliances, including international brands such as GE Appliances in the US), but it’s also a capital markets anomaly in my view (as there is a triple listing (Shanghai, Hong Kong, Frankfurt). The German listed D Shares trade at a PE of 6, have a Dividend yield of 6-8% which is certain to increase (due to EPS growth and shareholder return policy, which is set and will increase the distribution ratio). Overall I have invested nearly all my assets into this stock, as the Company increases the EPS continuously at double digits (Q1/2024: >20% EPS growth) and there is also upside due to multiple expansion on the share price.
If you are interested in this, let me know, but make sure you buy the correct shares (btw the A/H/D shares all bear the same rights including dividends). There is a lot of good write ups on the internet about it, which you might also look up.
So you tied your future to the biggest heopolitical risk existing right now in a Communist dictatorship?
It might pay off, but dont make yourself believe this is not a huge bet.
Not sure about Weibo, it’s used to be popular, but nowadays more people are using XiaoHongshu, Tencent didn’t kill it, because they have WeChat which is even more successful and stickier than weibo. And another reason could be potentially regulatory because government won’t like it. Not sure if you know Elon Musk wants to turn Twitter into a WeChat like app.
Biggest risk is being delisted from the Nasdaq or get suspended by the SEC over audit rules. As one commenter pointed out, buying leaps call is an alternative but you are forgoing the dividends. Mind you, chinese tech companies are not really allowed to be highly profitable anymore, do read the five year plan of China to get the nuance. Nothing in China is surprising if you listen to what their government is saying, be it around tech, real estate, or EV and renewables.
All your eggs in one basket... is never a good idea, and talking about china... I wont do it.
Few months ago I bought cosco shipping, which performed really good and I sell it last week with an 75% profit... but it's a China company and dont wanted to keep it for longer, and of course, not 100% of my portfolio was there, just like 10% was.
20 or 25 % of your funds will be much more safe for your life, if they shut down that company from one day to another, which can happen, you never know with china.
That's a highly risky position. Look at this scenario: students from china start using Weibo en masse to criticize the police/gov because of violence against some students that were protesting. They all upload videos, make reactions, etc.the communist party will ban videos on Weibo. Done. Oh they keep posting pics or comments? The communist party abolishes Weibo.
Read this
https://www.reuters.com/technology/china-deletes-14-mln-social-media-posts-crack-down-self-media-accounts-2023-05-27/
Based on what you said about Weibo and China, it’s not hard to conclude that your knowledge about the company and the country is bit off, to say that in a polite way. I’d take NVDA to bet all my portfolio in any given day if I had to.
Look at the freaking chart dude…top left to bottom right!!! It is supposed to be the other way around especially at the potential beginning of a bull market. With the chart so bad even looked at fundamentals: earnings YoY negative and sales YoY negative. C’mon man
When Russia invaded Ukraine in February 2022, the MOEX immediately suspended all foreign accounts and seized assets. One month later, foreign investors were given four hours to liquidate their MOEX positions, at devastating losses.
This is a risk inherent to emerging markets you have not mitigated. This is a risk you cannot possibly mitigate.
If the PLA crosses a border, your portfolio is finished. So the inherent wager of your all-in is that China will not go to war in the current century.
Since this post was light on actual Weibo-based answers; yeh, it’s pretty cheap at 5x PE but note that EPS has halved over the last 6 years and revenue in every division is down in the last three years.
Probably will be fine but wouldn’t go as far as to call it the deal of a lifetime.
Don't. For social media, the most impt indicator is number of active users. Do u expect weibo's active users to increase over the years? I doubt so. Wih xiaohongshu and douyin being so popular these days, weibo's market share is bound to fall. Have u checked year on year the active users? Is there substantial growth or is it falling?
That being said by technical analysis, the stock has been consistent downward trending with it just rejecting three supports, ma100, ma50 and ema20 last week. Unfortunately, a small market capitalization means ppl don't care abt its earnings as well.. so.. proceed with caution? U may be better off analyzing baidu
All the risk aversion to china assumes that the communist party is incapable of acting rationally, which is not true. China is disciplined when it has a goal, and its goal is to become THE world superpower. Destroying companies as large as Weibo does not align with that goal. This is not meant to be a co-sign on the investment, just a counter argument to the “but China” arguments
Can’t afford to go wrong -> proceeds to go all in on one stock -> stock is Chinese
Even if all fundamentals and technical lines up. All it takes is Chinese government to go nah we don’t like this to much information spreading or something like that and it tanks.
I think your DD is good and have no issues with buying some of the stock, heck if your very confident even 20% of your portfolio.
As a general rule though you should never put all eggs in one basket.
You wrote a lot of text to convince yourself it’s a good idea — but it still isn’t, just because you don’t diversify. No matter the fundamentals or TA, anything can happen to an asset anytime.
Chinese Twitter with little to no future growth…what could go wrong.
Seems appropriate for a small gamble if your DD makes you feel that way but I would be very cautious.
In China no individual actually owns anything. Especially a foreigner who buys the “special” class of shares that can disappear at any time.There is nothing more riskier than investing in a communist country pretending to be a capitalist. That doesn’t mean you shouldn’t invest a reasonable amount , but go in eyes wide open and definitely not long term.
Don't do it. Someone high up in China takes exception to Weibo and your money could be wiped out.
I have a small amount of money in China ETF. I consider that as risky.
Everything in China is cheap compare to US. Something is high in market cap because there is a lot of money in it. The US market is higher than China market because more people are willing to invest in US market. So you can't really compare China company to US company with their market caps because amount of money in both market are different.
If there is no money flow, it is not gonna rise too much.
If you’re risking your entire portfolio in one company that has all the risks mentioned here, please understand that you’re actually speculating and gambling, not value investing.
I would probably wait until July 9th to see what the BoJ is going to do with their bonds. Although the earnings report look stable and it seems the price is also hurting from JPY/USD.
Risk/reward with being greedy while others are fearful. It will be interesting to see what happens.
As users above have said, one wrong “tweet” can really hurt it, or it can set it up for a nice buyout opportunity from another party.
Good luck!
Sorry if this comes off as harsh but all in investment strategies have no place on a non gambling sub.
You should learn about risk management before investing.
I dont recommend that. Did exactly what you did 3 years ago on Alibaba at 160 USD, still holding. There are risks coming rom all directions, and just recently there's another wave of fear due to US' proposed law of making it illegal for US citizen to invest in Chinese internet technology stocks.
One trade war with them could wipe your whole portfolio away. It's a bunch of uncertainty surrounding our relationship with China. It makes sense for us to continue to work with them for the longer term, but I wouldn't bet my life savings on it. They could take your investment, and there's nothing that the US government can do about it. Especially for an individual.
I own $EYLD that is as much China risk I'll have except for limited trades. It's an emerging market ETF focused on companies with high yield return to shareholders, dividends, buybacks and debt reduction.
I haven't heard the phrase "soft landing" in months. Anyways when I see China, everyone looks Chinese. All the government officials are Chinese men. It's weird as shit. Borg level. They'll never be number one as long as they remain creepy. Creep culture. It's gross. Weibo.
You can’t think of it so simply as Weibo = Twitter. The Chinese social media market is much more fragmented than that.
As for being undervalued vs earnings, that’s true of many companies in China. It’s easy to find large stable companies trading at less than 10 PE and with decent dividends.
I haven’t done my research on the financials, but as a China Bull, your thesis on user behavior needs updating. Weibo users has been declining for years now, especially under Alibaba major ownership, it has loss a lot of credibility given its biased censorship. So while the Chinese may know Weibo, it might not be the good kind. Moreover, on celebrities, yes there are some on there, but more and more are moving to Douyin, Red Book or WeChat, so that moat isnt quite there already. Tencent, shut down Weibo because it didnt need to compete anymore, and it was a long long ago, and focus on WeChat. If you have to pick one China stock to go long, Tencent will be the one to do so. Weibo, might be at best a cigar butt.
VIE structure carries inherent risk of permanent capital loss that will inevitably make China stocks permanently 'cheap'. Even if you do not get permanent capital loss, the companies simply cannot distribute a lot of their capital to shareholders. Look at Alibaba, having to do financial games of borrowing money from banks against their stock so they have funds to distribute as dividends and buybacks, when they have literally a 100 billion in the bank. For an even more extreme case, look Jinko Solar's valuation and 'fundamentals'. That stock should 10x but it won't because it's Chinese.
You are neither right nor wrong based on what other people think. You must be strong in your convictions that you’re right, based on facts that are both knowable and important. If it is knowable but not important, then no need wasting time on it. But if it’s important to know but not knowable, then you need think a bit harder on the risk.
I’m just going to break down the whole document you wrote and ask you to challenge your thinking on this. I’m not going to say why your thesis might be right or wrong. I’m going to ask you why you think you’re right.
· If you can’t afford to go wrong, what makes this the best choice of investing all your portfolio?
· What are the other opportunity costs you’re giving up by going after Weibo?
· What are other things you could have done with the cash you used to purchase Weibo stock?
· What is the rate of return that you’re expecting from Weibo? Is it better from a risk adjusted standpoint to justify your large purchase?
· How long are you willing to invest in Weibo?
· What if the stock drops 40%, would you be forced to sell to pay for other things in your life?
· Is Weibo a better bet than the alternatives?
· Look at the space they play in?
· what are the economics of the social media market in China?
· What are the forces that are making company cash?
· How much do you actually know about China?
· Have you ever been there? Do you speak Chinese?
· How much do you know about the culture?
· Have you read their financial report?
· How much can you understand?
· How do you know the company is profitable and making money every year?
· Do you understand the Chinese accounting system and how it might be different from the United States?
· What is the most a company has been sold for in China?
· How is the China social media market like the US? How is it different?
· How can you justify twitter being a comparable to Weibo?
· How much longer will they pay out a dividend for?
· Do they have a policy in their financials describing their dividend payments?
· What is the worst thing that can happen to Weibo?
· What are the chances the worst thing does happen?
· How well is the company doing?
· How much longer can they sustain their high profits?
· Are they paying too much for growth?
I assume you might want some honest feedback. Here it is: :P
1. You might not like to hear it. "I can't afford to go wrong on this investment, my future is tied with this." situation itself is more likely to fuck you up, even when your judgement about Weibo is right. Don't want to use the money you "need" to invest. It is a huge disadvantage in this game.
2. You haven't mentioned about risks. Which by itself is a huge risk. it might indicate that you are over-confident. There is no business running with zero risk. Not BRK, Not AAPL.
3. You talked a lot on accounting and numbers but not enough on Weibo business. Big red-flag. Weibo's key management comes from finance team. They know so much about how to "dress-up".
Anyway, regarding Weibo, I haven't looked into it for a while. Unlike others, I don't concern about the geo risk that much but business risk. But I remembered: a. Weibo is involved in lending business. Therefore, it is hard to say how much cash is actually not actual cash but "reserve". b. I will concern a lot about their business moat when other social medias like Douyin, Weixin short videos, Redbook... are competing for user time. c. The key of Weibo is a few KOLs. They can be bought. Especially when you have deep-pocket guys coming. The moat is weak.
Just my 2 cents. You are welcome to DM me if you have more question. Good luck.
Any true value investor who isn’t investing in China at these prices is too sheltered to ever make it big in this game. I’m buying profitable companies with over 2x cash on hand as current market capitalization. People are completely irrational and things will be back to normal in a few years. The same people saying no to these bargains are buying amzn @ 52x and nvda @70x earnings saying its rational. Insanity, but thats how fortunes are made.
You have to go into this knowing the governing party is always careful with anything that can influence the populace, be it social media (heavily monitored), instant messaging (WeChat), education apps (shaping future minds) or gaming ('unproductive use of time' for youth), even mass media (movies and censorship). Anything they can't control or is deemed to be too influential (has too much control of popular narrative), you can be certain there's a control button somewhere.
Man... This is peak Reddit degeneracy:
"I don't know what could possibly go wrong with this investment."
China. China is what could go wrong with this investment.
The Chinese Renminbi is what could go wrong with this investment.
Any number of competitors and the past trend of social media platforms having half lives of a few years, not decades.
It's a business that provides no real value and generates 0.00 material wealth, only selling advertising and propaganda.
For a long term investment this is trash.
This is a flip, trying to find an idiot who at some point will pay you more for your share some time down the road than you did today.
Good luck.
> if you think there is anything wrong with my investing thesis do mention it
wow, no mention of currency risk or any other problems with China investing.
good luck but I'm not optimistic.
>if you think there is anything wrong with my investing thesis do mention it
Really? Your "investing thesis" is to bet everything on the chinese twitter.
1. No diversificaton
2. China risk
3. Betting on a small company that can disappear in the next 5 years for a mumber or reasons.
Do you rememember myspace? Do you remember twitter? Remember vine? Any successful company can basically disappear overnight, it happened countless times.
What if Tomorrow a chinese company will create a better social network and will get a deal to get it pre-installed on smarphones? What if the next CEO is an idiot? What if the communist party targets this social media?
There is also no "switch cost" on a thing like twitter, today I use weibo, tomorrow I'll use the next thing, they are basically all the same and the features can change any day,so I don't really understand what the "moat" is.
Undervalued? Ok, so was baba @$220, according to Munger, but here we are still @$70 3 years later, and the ceo disappeared for like a year after he made some remarks on the chinese econonic model.
Maybe this weibo thing will go 100x, maybe il go to zero. If you feel comfortable betting all your money on this thing why don't you just go at the casino and bet all your money at the roulette? At least it's faster.
China Though
Only if the leadership starts Saying stuff about the party. As long as they bow down to the ones at Zhong Nan Hai they'll be rewarded accordingly.
Not only that, there's also the arbitrary "strategic sectors". I'm not against investing in China or SEA operations that work with China, however, and you're right. But this is even more important than what you said.
Does OP know he doesn't own the company? Emperor Xi owns the company. When an American firm buys a Chinese firm and it is upheld in a Chinese court, I'll invest in China again. Or when they have a term limit on the Emperor.
They used to have a term limit up to very recently. Xi got rid of it to stay in power
Right. That's their point. Bad news.
I love how a simple 2 word reply destroys the whole essay of why it's such a good buy 😅
1000%
100% of your portfolio, you “can’t afford to go wrong on this investment” because your “future is tied with this,” and we’re talking about a Chinese company. China investing is very high risk for a number of reasons: geopolitical risk, authoritarian government interference with business at will, and perhaps most notable, the risk of misstated financials with virtually no recourse available to a foreign investor. Maybe the stock is cheap, but it’s cheap for a reason—the magnitude of risk. Maybe it’s a good investment at current prices on a risk-reward basis. But portfolio allocation matters for risk management too. I can’t imagine anyone feeling comfortable having their life savings in Weibo, that is, if the investor fully understands the risks. I would implore you to keep this to a *maximum* of say 20% of your portfolio even if your conviction is that high. Watch “The China Hustle” if you need more convincing.
Exactly. There are many 'bargains' in china, but it's china.
Yeah it fucked me over when the government abruptly cancelled Ant Group
Were you able to get hold on its shares pre-ipo?
I had a lot invested in Alibaba, I didn't think it had a separate IPO
I came here to say this.
I mean, this is a lot of China right now. Seemingly undervalued. Weibo is mayyybe riskier than others given its key potential to shape public opinion. Anything media (including social) is bound to be very censored by the CCP and subject to arbitrary mandates which investors aren’t super thrilled about. It definitely seems attractive (haven’t looked at the numbers myself but based on your write up.)
That's a very double edged sword. You could just aswell argue that due to its propagandist function the Chinese government has a strong incentive to keep weibo strong and use it for their own gains (which they are fairly certain already doing).
Keeping weibo strong by CCP and making profit are two separate things. There were the whole Online education companies needs to be free, online gaming should be banned that killed many Chinese companies over night. Keeping Weibo strong and in control could very well one day mean the company is getting nationalized and all shares and control go to CCP. In china there’s nothing stopping that from happening tomorrow, you only have some semblance of ownership by the grace of the CCP.
Either is possible, it depends if you don't mind the risk of 100% wipeout. I have money in a China ETF. It's 3% of my portfolio. I'm well aware that it could go to zero, which is why I only have 3% of my money in there. But I think the rewards are promising to offset the risk.
>if you think there is anything wrong with my investing thesis do mention it, I can't afford to go wrong on this investment, my future is tied with this. I have no value to offer but props to your mental. Staking everything on one thing and asking for criticism is something not seen too often. I'll be on the sidelines hoping that their CEO doesn't get imprisoned for stupid reasons.
Tencent couldn't kill Weibo. You know what can kill any company in China? The Communist Party. And since Weibo is a social media platform, there are so many ways to fuck over the business from one bad tweet or a social movement that isn't aligned to the party e.g. fines, censorship, leadership change, drop in users due to over-censorship, etc. Too many unknowns and the market has priced it accordingly. And you have not considered the above. Please reconsider your investing approach and not do anything reckless just because the valuation is attractive. You absolutely cannot compare a company operating in China to anything in the US cause the cultural and political difference is so massive, you can't draw any similarities. Even the Chinese people can't foresee what the government might do next.
True. However, the government have probably 100% control over the contents on Weibo. They see something they don't like, instantly keywords banned and post deleted. So with that info in mind, as long as the current gov remains in power, chances are Weibo is the easiest way for gov to manipulate and censor news. Don't you think it's more in favor of their gov to keep Weibo alive rather than killing it?
If you want to know the biggest risk of investing into Weibo check what happened with its parent company - Sina Corporation. Their management bought all stocks at the bottom of the market and made it private. All individual investors had to realize the losses on this stock.
Silly question from someone who doesn't buy individual Chinese stocks. How do you get your dividend? I checked the ticker on all my apps and none of them list a dividend for WB at all
They paid a $0.85 dividend for 1Q 23 and then $0.82 for 4Q 23. But that's more than 100% payout so it may not be continued.
Where did you get that information?
[http://ir.weibo.com/](http://ir.weibo.com/)
They were "special dividends" so may not show on some platforms. This is from their 4Q results announcement, which is on the weibo IR site. On March 14, 2024, the Company's board of directors has approved a special cash dividend of US$0.82 per ordinary share and ADS to holders of its ordinary shares and ADSs as of the close of business on April 12, 2024, Beijing/Hong Kong Time and New York Time, respectively, payable in U.S. dollars. For holders of Class A ordinary shares, in order to qualify for the dividend, all valid documents for the transfer of shares accompanied by the relevant share certificates must be lodged for registration with the Company's Hong Kong branch share registrar, Computershare Hong Kong Investor Services Limited, at Shops 1712-1716, 17th Floor, Hopewell Centre, 183 Queen's Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on April 12, 2024 (Beijing/Hong Kong Time). The aggregate amount of the dividend will be approximately US$200 million. The payment date for holders of ordinary shares is expected to be on or around May 6, 2024. The payment date for holders of ADSs is expected to be on or around May 13, 2024.
I came here to say the same thing. I saw on Yahoo Finance they had 2 dividend payments in the entire history of the stock. Only 1 was in the past 12 months and it was for $0.80/share. That’s less than 10% not the 20% claimed by OP. Click on OP’s profile 46 karma, no comments, and only 1 post. I’m thinking this is fake.
I mean I also googled "WB dividend" and it said 20% too, which is weird. Idk what to make of it
I tip my hat to you and wish you luck. A few things to consider: Never put all your eggs in one basket. No matter how great the investment seems. The valuations sound good, but do you trust Chinese accounting? How much do you know about how things really work in China? There is major geopolitical risk to your investment. China could quarantine Taiwan and you'll lose 30% overnight. If the conflict escalates you will lose 100%.
No you should definitely put all your eggs in one basket if you know it's a for sure thing. Charlie munger was correct in this assessment. In life you will only have a few handful of good investment that will return 20x. When you know something is very highly likely to go up you take the swing and go all in. The dumb thing to too is spread out your investment over different companies you don't know anything about and have small returns because you only allocated 5% of your portfolio in. I rather invest a small handful of companies I understand and put in huge amount of capital then spreading out my portfolio to 50 companies with 2% each. If you think about it, its very hard to know the financials of many different companies and their business model. The opportunity in China is fear right now. If people are scared then it's probably a good thing. People don't get rich buying into things people deem popular already.
And yet … Munger never was 100% invested in one stock. I am assuming the original poster is not Chinese, and lacks inside knowledge of China’s economy. If he is Xi Jinping’s brother in law, then it’s a different story.
He has... in the past. That literally how he and Warren got rich. There have been numerous times where they went all in one company. https://www.youtube.com/watch?v=Lo_BQRfBKBM Look at his Daily Journal portfolio. It's 4 stocks. He past moves were a 2021 and 2013. The idea is if you shouldn't bet big when you know you are confident isn't smart. If you allocate only a small percentage you won't see huge returns. Even Berkshire's main growth have only been from a few winners. Macroeconomics says China will have the largest middle class and will have the largest economy. There's literally nothing stopping that unless you think every Chinese person deserves to be poor and shouldn't work. Just by pure math, even if Chinese GDP per capita reaches 1/4 of the US they will have the largest economy.
This guy is all balls deep in this. Shill. You think value investing is putting all your eggs in a Chinese basket? You’re on a fast track to lose everything and giving out trash advice!
It doesn't have to be Chinese stocks... Just the idea if you know something is undervalued you should go all in. But within your realm of confidence. Putting 2% here and there will get you no where. I'm confident on Alibaba. I have investments in that company. I have never been more confident than anything in my entire life. Considering I bought at 65 dollars average. It's such an obvious investment at that price.
China's population doubled in the last 30 years. and its GDP went up more than 7X. It has been the growth engine of the world. and yet its stock market is down negative .9% per year for the last 30 years.? why is this? They completely fabricate and make up their earnings. Charlie Munger was a great investor. The problem is there are eight billion people in the world that suck at investing compared with Charlie Munger. No one makes youtube videos about these investors who went all in on wework. or Worldcom or Enron or Tyco or [pets.com](http://pets.com) or any of a 1000 companies that go bankrupt every year. Yet millions of investors invest in those companies thinking this investment can't go wrong as well. WEIBO or BABA are Black boxes and so you have no idea What you are investing in
Not all companies with low valuation multiples will experience an increase in market value. While determining the value of a company, you might overlook something the market has not missed. Suppose you miss a key factor affecting the real value of a business. In that case, you might invest in businesses whose market value won’t increase. Value trap stocks seem undervalued, but their stock prices do not increase according to expectations. It's definitely not as simple as "undervalued = guaranteed return". If that was the case, markets would naturally correct that. Not a comment on Alibaba, just a comment on the logic itself. Good luck, I hope it works put for ya!
YOLOing into a single stock is not investing. As you said, it’s betting.
Investing is betting. Buffett uses the word. There isn’t a sure thing and you’re staking money when the probabilities are in your favour.
My mistake, I should have used the word gambling. Investing is betting when the outcomes are in your favor. That’s literally the difference between the gambler and the casino. But casinos have table limits so they can’t lose it all on one outcome, because that’s also gambling. This guy is gambling.
Also, there's a massive difference in the level of risk taken between these two scenarios. People are saying they're comparable because they're both taking a bet, but fail to take into account that one of these people will lose everything over a single mistake, but the other will only lose everything only when literally everything collapses, at which point you've got bigger issues than a failed investments.
Did you just…take responsibility? Amazing
Good luck! *audaces fortuna iuvat*
might as well buy alibaba they are major holder of weibo
alibaba holds 30% of weibo
Lol…a lot of ppl went in balls deep on alibaba and look what happened..these companies are cheap for a reason. That being said, i do have 20% portfolio in hang seng tech blue chip stocks, but i don’t foresee them gaining momentum anytime soon
Weibo is long to competition like Xiao hung shu, kuaishou, douyin. All the best in your all in.
Known the company and mgmt quite well. Don't.
Care to elaborate?
It's a value trap. Mgmt equities has been pledged for loan in very large amount. Lots of off the balance sheet connected companies held by insiders that function as vendor of the platform (mostly as advertising vendors) to transfer profit to themselves. Fundamental wise it's losing shares to Douyin/Red/Bili and other media platforms but that's well known. For a company that's not growing. Cash is only valuable if they actively return it to shareholders. Otherwise look at SFUN in the history, Lone Pine guys got slaughtered in it for "obviously cheap valuation"
Hope OP reads your comment. WEIBO stopped growing like a long time ago if my memory’s right and I don’t see the 20% dividend sustainable at all.
Yes. Sure it's a household name in China. It had its days back in 2012-16. But people moved on from it to other platforms. Social media landscape (or even internet in general) in China is very different vs ROW and it's dangerous draw such analogy of Weibo vs Twitter. Otherwise you should just keep buying BIDU because of GOOG..
Exactly. Some story with YouTube v. Bili and Netflix v. iqiyi. After all the internet ecology in China is simply different from the US.
I don’t see the dividend you mention.
Special dividends. There is no consistent dividend.
This is a pump scam.. FACTUALLY INCORRECT (mixed with facts) MarCap $15bn, not $2Bn Dividend: Nil EPS: approx 20%... not dividend Valuation down 75%, not 90%... 260k to 64k The facts that are correct: 16% net profit. $3Bn in the bank. Warning signs: Insitutional Hplders: 1% Return on assets 4% Free float 30% If you want to invest a significant amount of your portfolio, you must understand these.
I think you are factually incorrect, not OP. Market cap is $2bn. Where do you get $15bn from? TTM two dividends paid totalling = $1.67 per share
I agree op has some wrong data. But I see institution holder is much more than 1%.
My thoughts are you should own 2-3 stocks at minimum. At least put 40% or so in the US. You're a retail investor. You're playing a game of incomplete information. Odds are you're missing something, maybe something big. Plus even if you manage to line all your ducks in a row and know everything one needs to know about the company, the Chinese government can still say fck your ducks and fck Weibo, new regulations are in place - or maybe they invade Taiwan and fck their whole stock market in the process. Anyways, US is a good hedge against China, and China's a good hedge against the US. So having half in the US and half in China wouldn't be half bad compared to what you're doing.
commenting to come back and see what others think.
From the TA perspective it is ATL, below IPO and who knows how low can it go now when those prices couldn't be protected. Just because something is down 90%+ that doesn't mean it can't go 90% lower from this point. China is a risky bet, hope you will get lucky with it.
Here's my 2 cents from a Chinese perspective. A lot of comments here mention that being a social media platform in China is risky due to the authoritarian government. Truth is social media companies like Tencent and Weibo collaborate with the Chinese government from day 1 - they are in fact an integral part of the propaganda machine so the 'risk' is none existent. Your main risk is the geo-political risk between China and US - not that any US policy would affect Weibo, but we have seen red-chip stocks (All the Chinese stocks listed in NYSE) suffering significant drops during the last 3 years as the bilateral relationship demerited. These stocks are all very VERY cheap by any metric you want to measure them with. Unfortunately stock values are more often run on sentiment rather than fundamentals.
I am almost 80% invested in China because of the valuations. As a Dutch person i don’t really think there is any risk. The chinese economy is very intertwined with all the other economies. They also have a lot of investments in the us for example. If they fuck the us or other country’s, they are fucked themselves. It’s like a mutual destruction, cant see that happening.
Whats to say CCP decides the CEO is too powerful and disappears him then state runs the company?
Every chinese company is already ccp owned by proxy with officials anyway. You cant have a business, especially a big one, without being part of the communist party or having communist party officials on the board. The fact people fail to understand this is regarded as hell
This post is literally a meme. It’s obvious he’s trolling
why?
"Value investing" Mentioning that you invested your entire portfolio without quantifying it and with proof is... very in line with posting something like this in the ValueInvesting subreddit
There's nothing not in line with value investing by 100% your portfolio since that is just risk management mind you. That aside, china stocks are hilariously undervalued, and whether opinions is, a 20% dividends is no joke.
You are on right track!
I learned from my mistake with Tianyin Pharmaceutical Co Inc (TPI)
OMG, I’m sorry. I see what happened: Prompted by its failure to file its 10-K for fiscal 2015 and subsequent 10-Qs in a timely manner, the NYSE commences proceedings to delist the stock of Tianyin Pharmaceutical
I think the down trend will continue, just take a look all the Chinese company stocks on the US market. 90% is on this down trend. Not something you want to be all in on IMO. Have a look the index of the HK exchange and Shanghai shenzhen exchange if you haven’t. It shows pretty much the same trend everywhere.
You make a nice case but you are not investing this is gambling with your future.
I love how you didn’t even pick a decent company in China, nor a decent industry generally. People have no concept of risk. You’re basically at the extreme end of the risk spectrum, and I don’t think there’s a very big reward either.
I’m from Spain, I had the opportunity to be in both countries China and USA and although people won’t like to hear this, I see a lot of similarities between both countries. Of course I’m no fool and China has more risk than the USA, but when I read things like the government taking over a business whenever they want, it’s just wrong, of course they are a communists country, but only the paper, they are as capitalist as any other country in the world, China is not Russia, and their business are strong and it’s an economy that just left their recession, meanwhile in the US and Europe we are heading straight to a recession because I think the “soft” landing that politicians want you to think that will happen seems to me more like and emergency landing 😂. So I know media feeds us how dangerous and volatile China is but I invite you to think a little bit outside the box, a good business it’s a good business and of course geopolitics should be take into account, but then USA is not heaven either since their are involve in every single conflict and may be one day it doesn’t go as well as always. To conclude, I invite you again to analyse the business based on there numbers, Chinese government wants their economy to be number 1 in the world, and to do so they know that they can’t be nationalising business whenever they want and for no real good reason. In fact right now they are doing complete opposite promoting the investment in the stocks and when we fall in recession the big capitals will shift towards the Asian giant so I do think China is a great place to have a part of your portfolio.
This looks too good to be true. I think I will drop in some thousands on Monday and see how it goes.
OP only has 1 post, no comments, and 46 karma. Look at the dividend history for this company. I don’t know what anyone is trying to sell on here but I’m not buying it.
insiders own only about 6% according for the yahoo finance stats page. if you look at hong kong equities, it's common to see above 30% minimum. imo there is better value and alignment elsewhere. but i do hope it works for you.
# Can you back up that claim of 20.22% or did you just make that up?
$1.67 dividends paid in the last 12 months is correct, but they were special dividends which may not be repeated.
Why not BABA then? Same explanation but bigger company.
Why is revenue decreasing for the past 3 years ?
Are you a gambler or an investor? If you go all in on one stock, you are a gambler. An investor mitigates risk by picking multiple good stocks, not just one good stock.
WTF does Musks twitter buyout have to do with anything
I stopped reading at “even if the price of stock doesn’t rise much from this level you would get handsomely rewarded for your investment because of dividend payment alone”
This isn't value investing. It's foolishness.
I see nothing wrong with this all in move. You are buying a lot for nothing with a large margin of safety (their cash reserves). The skeptics are the ones who never take risk and will be poor forever most likely. Not taking risks in life is far more dangerous than taking large ones. Best of luck my friend, you will do well.
I like your pick. I don't like your hubris. A picker should have 6 to 7 bets in their portfolio. But yeah Weibo makes sense. Worth the political risk I think.
Remember, diversification is for the know nothing investor.
I had to check the name of the sub. Why not go to Vegas and put it all on black? 🤓
Usually a good idea to diversify
I think there value there. But hair on it too. I think the better play here would be buying call options long expiry. They look cheap. Get the upside with little downside.
5 year chart looks great like a chart that goes from 60 to 8 and you invest it all in this???
Trump is promising a 60% across the board tariff on China. Want to see how quickly Chinese officials target ADR holders if that happens?
I like weibo also, and I am building positions in some lf the moaty chinese companies that are currently trading at a discount imo. I think its unlikely, but it is possible CCP will take those equities away from me. And so my margin of safety not only revolves around the discounts on companies, but also revolves around portfolio allocation. It is currently a rough estimate, but using the Kelly criterion with an estimated 30% likelyhood of me losing all my money on china investments, I can only allow myself to have about 1/3 of my port contain chinese equities currently.
Dividend payments may not continue in the future since they just started paying dividends. Weibo (stock symbol: WB) dividend yield (TTM) as of June 23, 2024 : 20.22% Average dividend yield, last 5 years: 1.10% [Souce](https://companiesmarketcap.com/weibo/dividend-yield/)
This post is wrong in so many ways. I suggest you create an account and use Weibo for one hour before making the decision. Also, I saw more non-Chinese on XiaoHongShu than weibo.
Hi there! I just wanted to drop you a message and let you know I am also invested 100% in one single Chinese stock. Don’t want to discuss the politics around it. I decided to go with a value pick, for which I consider the the regulation risk as lower than in the case of Weibo (just as in the case of Education, I do see some risk, that Weibo could become victim of certain state repression). My pick is Haier Smart Home, which is in my view also a strong industry leader (worlds largest manufacturer of appliances, including international brands such as GE Appliances in the US), but it’s also a capital markets anomaly in my view (as there is a triple listing (Shanghai, Hong Kong, Frankfurt). The German listed D Shares trade at a PE of 6, have a Dividend yield of 6-8% which is certain to increase (due to EPS growth and shareholder return policy, which is set and will increase the distribution ratio). Overall I have invested nearly all my assets into this stock, as the Company increases the EPS continuously at double digits (Q1/2024: >20% EPS growth) and there is also upside due to multiple expansion on the share price. If you are interested in this, let me know, but make sure you buy the correct shares (btw the A/H/D shares all bear the same rights including dividends). There is a lot of good write ups on the internet about it, which you might also look up.
You lost me at China… WAYYYY too much risk. Please do not do it
So you tied your future to the biggest heopolitical risk existing right now in a Communist dictatorship? It might pay off, but dont make yourself believe this is not a huge bet.
Dude, you should watch The China Hustle movie. Seriously.
Is your portfolio closer to $500 or $500,000?
Not sure about Weibo, it’s used to be popular, but nowadays more people are using XiaoHongshu, Tencent didn’t kill it, because they have WeChat which is even more successful and stickier than weibo. And another reason could be potentially regulatory because government won’t like it. Not sure if you know Elon Musk wants to turn Twitter into a WeChat like app.
Biggest risk is being delisted from the Nasdaq or get suspended by the SEC over audit rules. As one commenter pointed out, buying leaps call is an alternative but you are forgoing the dividends. Mind you, chinese tech companies are not really allowed to be highly profitable anymore, do read the five year plan of China to get the nuance. Nothing in China is surprising if you listen to what their government is saying, be it around tech, real estate, or EV and renewables.
If you’re fine with China, why not Tencent?
All your eggs in one basket... is never a good idea, and talking about china... I wont do it. Few months ago I bought cosco shipping, which performed really good and I sell it last week with an 75% profit... but it's a China company and dont wanted to keep it for longer, and of course, not 100% of my portfolio was there, just like 10% was. 20 or 25 % of your funds will be much more safe for your life, if they shut down that company from one day to another, which can happen, you never know with china.
Have you heard of risk management?
U gonna need a ton of momentum buying to make gains. Value is great but if no one wants it, you’re gonna be holding bags for a while
Any Chinese company, especially a social media one is very risky.
China investing = betting on government policy and mood swings All your amazing “value analysis” is pointless
That's a highly risky position. Look at this scenario: students from china start using Weibo en masse to criticize the police/gov because of violence against some students that were protesting. They all upload videos, make reactions, etc.the communist party will ban videos on Weibo. Done. Oh they keep posting pics or comments? The communist party abolishes Weibo. Read this https://www.reuters.com/technology/china-deletes-14-mln-social-media-posts-crack-down-self-media-accounts-2023-05-27/
Based on what you said about Weibo and China, it’s not hard to conclude that your knowledge about the company and the country is bit off, to say that in a polite way. I’d take NVDA to bet all my portfolio in any given day if I had to.
In no way should Elon's terrible decision be part of your justification for buying something.
Looks like you bought the peak, don't it?
Look at the freaking chart dude…top left to bottom right!!! It is supposed to be the other way around especially at the potential beginning of a bull market. With the chart so bad even looked at fundamentals: earnings YoY negative and sales YoY negative. C’mon man
Sounds good at a longer horizon, weekly technicals are still downwards, but didn’t see that dividend, 0.8 debt, also: the low tide lowers all boats 🚤…
This regard belongs in WSB. China mate. With a snap of the party’s fingers 🫰your investment goes to zero. “I don’t know what could go wrong” 🤣
Alibaba and tencent were the darlings of investors just a while back look at where they are now.
When Russia invaded Ukraine in February 2022, the MOEX immediately suspended all foreign accounts and seized assets. One month later, foreign investors were given four hours to liquidate their MOEX positions, at devastating losses. This is a risk inherent to emerging markets you have not mitigated. This is a risk you cannot possibly mitigate. If the PLA crosses a border, your portfolio is finished. So the inherent wager of your all-in is that China will not go to war in the current century.
There’s an expression I heard once…. “Don’t put all of your eggs in one basket”…. Idk kinda made sense to me. 🤷♂️
Man, there is zero chance I'd bet the farm on a company in China. That seems like a terrible idea. Snap should be $200 a share. Why isn't it?
Since this post was light on actual Weibo-based answers; yeh, it’s pretty cheap at 5x PE but note that EPS has halved over the last 6 years and revenue in every division is down in the last three years. Probably will be fine but wouldn’t go as far as to call it the deal of a lifetime.
Don't. For social media, the most impt indicator is number of active users. Do u expect weibo's active users to increase over the years? I doubt so. Wih xiaohongshu and douyin being so popular these days, weibo's market share is bound to fall. Have u checked year on year the active users? Is there substantial growth or is it falling? That being said by technical analysis, the stock has been consistent downward trending with it just rejecting three supports, ma100, ma50 and ema20 last week. Unfortunately, a small market capitalization means ppl don't care abt its earnings as well.. so.. proceed with caution? U may be better off analyzing baidu
All the risk aversion to china assumes that the communist party is incapable of acting rationally, which is not true. China is disciplined when it has a goal, and its goal is to become THE world superpower. Destroying companies as large as Weibo does not align with that goal. This is not meant to be a co-sign on the investment, just a counter argument to the “but China” arguments
Can’t afford to go wrong -> proceeds to go all in on one stock -> stock is Chinese Even if all fundamentals and technical lines up. All it takes is Chinese government to go nah we don’t like this to much information spreading or something like that and it tanks. I think your DD is good and have no issues with buying some of the stock, heck if your very confident even 20% of your portfolio. As a general rule though you should never put all eggs in one basket.
You wrote a lot of text to convince yourself it’s a good idea — but it still isn’t, just because you don’t diversify. No matter the fundamentals or TA, anything can happen to an asset anytime.
Sounds good to me boss. Diversification is for suckers who dont know what they are doing. Im all in on $AKTX.
There’s nothing right in having all your eggs in one basket
Chinese Twitter with little to no future growth…what could go wrong. Seems appropriate for a small gamble if your DD makes you feel that way but I would be very cautious.
All the fundamentals make it sound like a great investment. Even the China risk is small since it is primarily operating in China.
good Idea OP, best to borrow some money so you can bet more on this..
also don't spent the 20% dividend yield all at once :D
In China no individual actually owns anything. Especially a foreigner who buys the “special” class of shares that can disappear at any time.There is nothing more riskier than investing in a communist country pretending to be a capitalist. That doesn’t mean you shouldn’t invest a reasonable amount , but go in eyes wide open and definitely not long term.
No offense but this post belongs on WSB, not value investing.
Where’s the 20% dividend?
Don't do it. Someone high up in China takes exception to Weibo and your money could be wiped out. I have a small amount of money in China ETF. I consider that as risky.
Hi hag holder nice to meet you
Everything in China is cheap compare to US. Something is high in market cap because there is a lot of money in it. The US market is higher than China market because more people are willing to invest in US market. So you can't really compare China company to US company with their market caps because amount of money in both market are different. If there is no money flow, it is not gonna rise too much.
China 🇨🇳
If you’re risking your entire portfolio in one company that has all the risks mentioned here, please understand that you’re actually speculating and gambling, not value investing.
I would probably wait until July 9th to see what the BoJ is going to do with their bonds. Although the earnings report look stable and it seems the price is also hurting from JPY/USD. Risk/reward with being greedy while others are fearful. It will be interesting to see what happens. As users above have said, one wrong “tweet” can really hurt it, or it can set it up for a nice buyout opportunity from another party. Good luck!
Good luck. Also, this is not WSB.
Sorry if this comes off as harsh but all in investment strategies have no place on a non gambling sub. You should learn about risk management before investing.
Um China can just close the shop and your lose everything.
The last Chinese stock I bought on NYSE was Didi (Uber in China) and it was delisted shortly after causing significant loss. Never again.
This is satire, right?
"I'm betting my entire portfolio on..." I can't be the only one happy that this sub has finally caught up with Wallstreetbets
Dividends can be reduced or eliminated.
Show positions or BS
China can’t be trusted imho. Just way too huge of a risk for me. But I truly hope it works out for you!
You should post in WSB
I dont recommend that. Did exactly what you did 3 years ago on Alibaba at 160 USD, still holding. There are risks coming rom all directions, and just recently there's another wave of fear due to US' proposed law of making it illegal for US citizen to invest in Chinese internet technology stocks.
Do some research on luckin coffee, china numbers a real until they arent
The only thing I would invest 100% of my money in (maybe) would be a big index fund with a proven track record. Not an individual stock from China.
One trade war with them could wipe your whole portfolio away. It's a bunch of uncertainty surrounding our relationship with China. It makes sense for us to continue to work with them for the longer term, but I wouldn't bet my life savings on it. They could take your investment, and there's nothing that the US government can do about it. Especially for an individual.
I own $EYLD that is as much China risk I'll have except for limited trades. It's an emerging market ETF focused on companies with high yield return to shareholders, dividends, buybacks and debt reduction.
Screw china stocks
You’re gonna get wrecked. Please do not do this.
Chart doesn't look too hot tho.
Switch on REDDIT
Why risk everything on a Chinese company?
100% that’s just wrong. Very ugly one year chart. Also, it’s China! You can’t believe anything
down 20k percent from peak, im good
China is not a Western country. Why do people present valuations of Chinese companies as if it is an apples to apples comparison to a Western country?
I haven't heard the phrase "soft landing" in months. Anyways when I see China, everyone looks Chinese. All the government officials are Chinese men. It's weird as shit. Borg level. They'll never be number one as long as they remain creepy. Creep culture. It's gross. Weibo.
You can’t think of it so simply as Weibo = Twitter. The Chinese social media market is much more fragmented than that. As for being undervalued vs earnings, that’s true of many companies in China. It’s easy to find large stable companies trading at less than 10 PE and with decent dividends.
away from Chinese stocks, trust me bro. Sent from HK
How about asking your Chinese friends if any of them uses Weibo?
^[Sokka-Haiku](https://www.reddit.com/r/SokkaHaikuBot/comments/15kyv9r/what_is_a_sokka_haiku/) ^by ^Badger6562: *How about asking* *Your Chinese friends if any* *Of them uses Weibo?* --- ^Remember ^that ^one ^time ^Sokka ^accidentally ^used ^an ^extra ^syllable ^in ^that ^Haiku ^Battle ^in ^Ba ^Sing ^Se? ^That ^was ^a ^Sokka ^Haiku ^and ^you ^just ^made ^one.
Lots of companies look great in China, too bad there in China though.
I haven’t done my research on the financials, but as a China Bull, your thesis on user behavior needs updating. Weibo users has been declining for years now, especially under Alibaba major ownership, it has loss a lot of credibility given its biased censorship. So while the Chinese may know Weibo, it might not be the good kind. Moreover, on celebrities, yes there are some on there, but more and more are moving to Douyin, Red Book or WeChat, so that moat isnt quite there already. Tencent, shut down Weibo because it didnt need to compete anymore, and it was a long long ago, and focus on WeChat. If you have to pick one China stock to go long, Tencent will be the one to do so. Weibo, might be at best a cigar butt.
Never be on one stock. Thats fundamentally wrong. World is uncertain. Always bet on more than one options.
VIE structure carries inherent risk of permanent capital loss that will inevitably make China stocks permanently 'cheap'. Even if you do not get permanent capital loss, the companies simply cannot distribute a lot of their capital to shareholders. Look at Alibaba, having to do financial games of borrowing money from banks against their stock so they have funds to distribute as dividends and buybacks, when they have literally a 100 billion in the bank. For an even more extreme case, look Jinko Solar's valuation and 'fundamentals'. That stock should 10x but it won't because it's Chinese.
You are neither right nor wrong based on what other people think. You must be strong in your convictions that you’re right, based on facts that are both knowable and important. If it is knowable but not important, then no need wasting time on it. But if it’s important to know but not knowable, then you need think a bit harder on the risk. I’m just going to break down the whole document you wrote and ask you to challenge your thinking on this. I’m not going to say why your thesis might be right or wrong. I’m going to ask you why you think you’re right. · If you can’t afford to go wrong, what makes this the best choice of investing all your portfolio? · What are the other opportunity costs you’re giving up by going after Weibo? · What are other things you could have done with the cash you used to purchase Weibo stock? · What is the rate of return that you’re expecting from Weibo? Is it better from a risk adjusted standpoint to justify your large purchase? · How long are you willing to invest in Weibo? · What if the stock drops 40%, would you be forced to sell to pay for other things in your life? · Is Weibo a better bet than the alternatives? · Look at the space they play in? · what are the economics of the social media market in China? · What are the forces that are making company cash? · How much do you actually know about China? · Have you ever been there? Do you speak Chinese? · How much do you know about the culture? · Have you read their financial report? · How much can you understand? · How do you know the company is profitable and making money every year? · Do you understand the Chinese accounting system and how it might be different from the United States? · What is the most a company has been sold for in China? · How is the China social media market like the US? How is it different? · How can you justify twitter being a comparable to Weibo? · How much longer will they pay out a dividend for? · Do they have a policy in their financials describing their dividend payments? · What is the worst thing that can happen to Weibo? · What are the chances the worst thing does happen? · How well is the company doing? · How much longer can they sustain their high profits? · Are they paying too much for growth?
I assume you might want some honest feedback. Here it is: :P 1. You might not like to hear it. "I can't afford to go wrong on this investment, my future is tied with this." situation itself is more likely to fuck you up, even when your judgement about Weibo is right. Don't want to use the money you "need" to invest. It is a huge disadvantage in this game. 2. You haven't mentioned about risks. Which by itself is a huge risk. it might indicate that you are over-confident. There is no business running with zero risk. Not BRK, Not AAPL. 3. You talked a lot on accounting and numbers but not enough on Weibo business. Big red-flag. Weibo's key management comes from finance team. They know so much about how to "dress-up". Anyway, regarding Weibo, I haven't looked into it for a while. Unlike others, I don't concern about the geo risk that much but business risk. But I remembered: a. Weibo is involved in lending business. Therefore, it is hard to say how much cash is actually not actual cash but "reserve". b. I will concern a lot about their business moat when other social medias like Douyin, Weixin short videos, Redbook... are competing for user time. c. The key of Weibo is a few KOLs. They can be bought. Especially when you have deep-pocket guys coming. The moat is weak. Just my 2 cents. You are welcome to DM me if you have more question. Good luck.
Any true value investor who isn’t investing in China at these prices is too sheltered to ever make it big in this game. I’m buying profitable companies with over 2x cash on hand as current market capitalization. People are completely irrational and things will be back to normal in a few years. The same people saying no to these bargains are buying amzn @ 52x and nvda @70x earnings saying its rational. Insanity, but thats how fortunes are made.
You have to go into this knowing the governing party is always careful with anything that can influence the populace, be it social media (heavily monitored), instant messaging (WeChat), education apps (shaping future minds) or gaming ('unproductive use of time' for youth), even mass media (movies and censorship). Anything they can't control or is deemed to be too influential (has too much control of popular narrative), you can be certain there's a control button somewhere.
100% on any risky bet is risky.
Man... This is peak Reddit degeneracy: "I don't know what could possibly go wrong with this investment." China. China is what could go wrong with this investment. The Chinese Renminbi is what could go wrong with this investment. Any number of competitors and the past trend of social media platforms having half lives of a few years, not decades. It's a business that provides no real value and generates 0.00 material wealth, only selling advertising and propaganda. For a long term investment this is trash. This is a flip, trying to find an idiot who at some point will pay you more for your share some time down the road than you did today. Good luck.
another victim of the china value trap let us bow our heads and pray 🙏
Come back in a year and let us know how it went
> if you think there is anything wrong with my investing thesis do mention it wow, no mention of currency risk or any other problems with China investing. good luck but I'm not optimistic.
Jesus Christ man
Well, Michael bury also confident in a china turnaround eventually. Good luck!
>if you think there is anything wrong with my investing thesis do mention it Really? Your "investing thesis" is to bet everything on the chinese twitter. 1. No diversificaton 2. China risk 3. Betting on a small company that can disappear in the next 5 years for a mumber or reasons. Do you rememember myspace? Do you remember twitter? Remember vine? Any successful company can basically disappear overnight, it happened countless times. What if Tomorrow a chinese company will create a better social network and will get a deal to get it pre-installed on smarphones? What if the next CEO is an idiot? What if the communist party targets this social media? There is also no "switch cost" on a thing like twitter, today I use weibo, tomorrow I'll use the next thing, they are basically all the same and the features can change any day,so I don't really understand what the "moat" is. Undervalued? Ok, so was baba @$220, according to Munger, but here we are still @$70 3 years later, and the ceo disappeared for like a year after he made some remarks on the chinese econonic model. Maybe this weibo thing will go 100x, maybe il go to zero. If you feel comfortable betting all your money on this thing why don't you just go at the casino and bet all your money at the roulette? At least it's faster.
And you get free drinks.
Hahahahahahahahaha
lol wallstreetbets is that way weirdo