So many internet companies get listed in America at the same period. And the internet industry worries about a new round internet bubble.
On 25 April Sohu published it first quarter result and its CEO Charles Zhang said in the interview that: “China concept stocks are sizzling now, which is like the internet bubble period in 1999. And any internet companies could go listed in America and get a high market value in that time.” Charles Zhang, who experienced the dotcom bubble in 1999, worries that the new round internet bubble with the China concept stocks as the main force is approaching.
The most of the internet companies in China are seen as Chinese story plus America model. For example Youku.com is seen as Youtube.com in China and renren.com as Facebook. Charles Zhang said that: “Now the capital market is just like that of in 1999. At that time Wall Street adopted the concept of the internet enthusiastically. And now the Wall Street has fantasies about China concept stocks.
He also added that the bubbles have one thing in common that investors emphasize on the concept but not of the fundamentals. And the price/earnings ratio is a good index. It is not a normal phenomenon that many internet companies have a high market value but with low price/earnings ratio. In his view the crazy capital bubble has influenced the normal development of the internet market.
Charles Zhang said that people liked uncertainty that could provide us with imagination. And people would believe that it is bubble only when the bubble bursts.
Yes I believe it is a new round dotcom bubble. The burst of the bubble is just a matter of time.