China Finance under fire

One of the worst performing China business information stocks we have been tracking is ChinaFinance.com. (Nasdaq: JRJC), down 41.7% since January. Some interesting discussion about the reasons for this have been knocking about on the China Stock Blog. The dismal performance of China's stock markets is given as one of the key reasons. Probably right. Any self-respecting company would run a mile rather than list in Shanghai or, even worse, Shenzhen. No surprise that the big boys are all piling into Hong Kong (less enthusiastic for New York post Sarbanes-Oxley). That takes them out of the reach of ChinaFinance into the hands of more major players like PR Newswire and Xinhua Finance.

What in heavens, though, is a company with $1.85 million quarterly revenues and a very dodgy looking business plan doing listed on Nasdaq in the first place? A reader on the China Stock Blog today poses the same question in a comment. He captures the key point very succintly:

Simply put, the company should never have gone public. Management does not have a viable business plan yet and their spending is unsustainable.