If the Chinese are taking over the world, 58 dot com (WUBA) is a sign of the times. The internet company that is a Chinese version of Craig’s List, offering a huge classifieds directory, debuted on the NYSE on October 31, 2013 at $17 a share, shot up to a high of $39.63 and is now holding at around $36, more than doubling investors’ money in two months’ time. 58 dot com (WUBA) has entered the market with a bang.
58 dot com (WUBA)’s web site, is a platform for selling new and used products from apartments and cars to clothing and also has travel and job categories. It comes with a nifty Smartphone app for buying and selling on the go, which is one of its biggest benefits, as mobile users become more prominent. It also has an appearance that’s clean and well-designed, a big plus for an online marketplace. While currently the leader in the market, the company does have tight competition from other, equally sophisticated websites. It is, however, the first to get into the stock market with its recent IPO, which may give it a leg up on competitors in terms of cash flowing in, with a strong market cap of $436 million. They certainly seem like they are trying to stay ahead, with money pouring into research and development in an attempt to offer new products and services, increase user-friendliness and altogether beat out everyone else to stand alone at the top of its game. Only time will tell if they will be successful at outpacing the others, although the swift increase in the share price and the fact that it has stayed steady means many investors are confident in their success.
58 dot com (WUBA) makes money from client membership fees as well as advertising revenue. While they are the current leader in their market, online classifieds make up only 15% of the total secondhand sales market in China, so there is tremendous room for growth even if they didn’t expand in any other way. There are, though, new categories to conquer and new localities to break into. Basically, management feels that the sky is the limit, and that’s where they’re taking the company. Analysts agree, with the company rated a buy at Citigroup and outperform at Pacific Crest. There are currently no other ratings.
The company is making a smooth way up, with net income of $9.3 million for Q3 of this year, as opposed to a net loss of $5.9 million for Q3 of last year. Revenue for Q3 was up 77.6% to $41 million. All signs point toward increased income, revenue, growth, business and share price for this Chinese marketplace.
The things to watch for 58 dot com (WUBA)? The stock plunged at one point in November when, notwithstanding the excellent revenue and income jumps, earnings per share fell $.02 below analysts’ expectations. Wall Street is reevaluating to keep expectations in line with the company’s capabilities, and the share price bounced back.
58 dot com (WUBA) closed at $36.70 on Friday, January 3rd, 2014.
I hope the above information helps you in putting on profitable trades in 58 dot com (WUBA)in near future.