Sales and Marketing Expenses accounted for 53% of revenue in the quarter ended June 30, 2019.
The high ratio of S&M Expenses verses Revenue indicating a strong tie between the current revenue growth and marketing/sales effort, which is not a good signal for a Internet company providing market leading service.
HongKong Index ETF
FLHK = FTSE Hong Kong RIC Capped Index
EWH = MSCI Hong Kong Index
（？） 阶段性规律？ ， 欧美主导金价， 黄金国际价格（美元）倾向于在欧美白天股市交易时段上升，在欧美夜晚（亚洲白天）时段回落，呈现明显的规律性。
Market Observation: 2019-9-5
The Correlation between Borkerage Stocks and The Market Index of A Share
Extremely high correlation in the past 3 years, the volatility of brokerage sector index is about 2X-3X of the market index. Move upward and downward synchronously.
Sep 9th, 2019. 16:00 beijing time, FuTu app pushed message regarding a 7% price jump in premark for Cyou.
16:07 Beijing time, market watch app pushed message about the announcement of acquisition proposal published on PRNewswire, price jumped further
to USD 8.3
16:37 Beijing time, price jumped to 8.5.7
The price jump stabled at 10% discount of M&A price announcement, which is the same case in HPJ
In the previous trade, Cyou was sold due to a fear of China-US trade war would not fade out in years. As dividend declaration and outside merger was not likely in the current time, I assume there would be no news that can act as the driving force of the valuation discovery of CYOU. Apparently I missed the possibility of internal merger, which would very likely happen when the stock price experienced serious recent drop.
FRAN Short Squeeze
Short of Float (Aug 15, 2019) is 42.33%. In Sep 10, 2019, FRAN published quarterly financial report showing an improvement on operation. The stock surged from USD 5 to USD 10.5 at marketing opening, a price surged of 100%, short positions are partially forced to cover, new short positions are opened, turnover ratio over 400%. Market closed in USD 10.3. In Sep 11, 2019, FRAN price surged from USD 11.43 to USD 18, closed end of market at USD 16.65. Another 63.3% surged, short borrowing rate increased from 8.63% to 10.22%, turnover rate over 200%. In Sep 12, 2019, FRAN price dropped from USD 15.98 to USD 14.06, short borrowing rate surged to 187.04%. In Sep 13, 2019, FRAN price surged from USD 14.37 to USD 18.39, another 27.9% surge, short borrowing rate surged to 273.16%, turnover ratio over 200%.
The price growth of FRAN is constantly driven by vertical price spikes that are very likely to be forced short cover. After three days, the price of FRAN increased by 260%. The short positions opened around USD 5 before quarterly report are most likely to be coverred. New short positions opened after quarterly report at around USD 9 might or might not survive the second phase price growth of around 100%.
The price hike of FRAN is a self-reinforcing process as buyers anticipated buy orders from investors who are happy with the improve on finanical report, an prevailing bias that can be exploited by following the trend, creating a short squeeze of FRAN together with other uncoordinated investors who expect the same process to occur, fullfilling the typical pattern of buying because there is a market consensus that price will go up. After the first wave of forced short covering happened, a large portion of short sellers are forced out, replaced by a new batch of short positions, then these positions are force to close due to continuous price hike, which pushed the price higher, with large turnover ratio over 200% at price high days.
The self-reinforcing process slow down when newly opened short positions are at a high price that are difficuly to go up further, at the same time short ratio declined. The process will start to reverse when he previous winners of the game are eager to cash out, expecting a reverse of the trend and a consensus is reached, then a self-correcting process begins.
Attentions Brought By M&A News Can Maintain the Valuation of A Stock Even After Cancelled
Sep 17, 2019. The non-binding offer of Sohu to Cyou was withdrawed, but the stock price of Cyou was maintained at the level when the offer was made.
The Company has liquidity and solvency issue in year 2020, but the risk might not be priced in.
Macquarie Research - Industrial Team, ET AL
Unexpected Quarterly Report
Yahoo Analyst Ratings and Estimate
The EPS is GAAP -EPS on Yahoo.
The Fair Value of ETF at Market Trading Hours
The fair value of ETF at market trading hours is determined by the supply and demand of the share, which are then determined by the in-time market price of the underlying securities and the expectation of the NAV of the ETF share on market close.
The Application of RS_T1 Strategy
RS_T1 strategy should only be used to generate secondary revenue by utilizing existing capital (1/5 of current capital).
TAL Impairment Loss on Long-term Investment
Fitting in the GAAP impairment loss on equity investment principle, the cost of equity investment (can be long-term investment or short-term investment) should be write down if a evaluated permantment loss is incurred.