Chinese tech company Sina’s (NASDAQ:SINA) shares have somewhat stabilized today after a precipitous fall yesterday. The sell off was triggered by Sina’s decision to fall in line with the Chinese government’s directive to regulate the company’s Weibo micro-blogging service. The government’s action stems from its objective to censor internet chatter and prevent internet users from becoming an agitating force.
However, fears of regulatory risks may be overblown for several reasons. First, shutting down Weibo would have adverse political consequences. Second, censorship is a fact of life in China (NYSE:FXI). Investors know what they are getting into.
Other Chinese Internet stocks got blasted on fears of government interference: Baidu (NASDAQ:BIDU), Sohu.com (NASDAQ:SOHU), Shanda Interactive (NASDAQ:SNDA), Youku.com (NYSE:YOKU), Netease.com (NASDAQ:NTES), Dangdang Inc. (NYSE:DANG), and RenRen (NYSE:RENN).
Sina’s (NASDAQ:SINA) stock closed at $90.02 today, down 2.95%. Shares are up 30.8% year to date. The stock’s trading range for the year is between $48.50 and $147.12.