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SouFun Holdings Ltd. (NYSE:SFUN) Stock Plummets Over 1/4th in June

Posted in Business1 month ago • Written by Robert JohnsonNo Comments

Dallas, Texas, 06/13/2014 (ustrademedia) – Real estate Internet portal operator in China, SouFun Holdings Ltd. (NYSE:SFUN) witnessed one of the worst performances of its share on the bourses on Thursday when its stock plunged over 17%. The volume too was heavy compared to the preceding few days of trading. The reason for such a strong negative sentiment is that a brokerage has downgraded its share and the company is likely to face pricing pressures in China.

Stock Plunges

Based on the 5:1 stock split reflection, the SouFun Holdings Ltd. (NYSE:SFUN)’s share reached a high of $19.94 and a low of $4.60 in the last one year. The stock plunged as much as 26.23% in June current year based on the closing price of $11.97 on May 30. Except for a couple of days, shares of SouFun Holdings witnessed the downside closing in all the days of trading in June.

During the intra-day trading on Thursday, the stock had hit a low of $8.53, which meant a loss of nearly 20%. Compared to the yearly high price, the shares of the company are trading down by 55.7%. The only consoling point is that the stock is 92% higher than the 52-week low price.

Significantly, shares of SouFun Holdings Ltd. (NYSE:SFUN) are trading below the technical barometers of 50-day, as well as, 200-day moving averages of $11.61 and $14.56 respectively. This suggests that a further downside cannot be ruled out.

What Changed

There has been some kind of negative sentiments on the stock for quite some time. This has been blown out on Thursday when Deutsche Bank has downgraded the shares of SouFun Holdings Ltd. (NYSE:SFUN) to Hold from Buy rating and also cut its price tag to $11.00.

The brokerage has obviously seen enough reasons for a downgrade since the real estate portal operator disclosed a 40% discount on the subscription fee to the secondary listing customers, which accounts for about 25% of its revenues.

Analyst Vivian Hao has reportedly viewed a deteriorating economics for SouFun Holdings Ltd. (NYSE:SFUN) card business that will see a declining take-rate with the developers. He attributed this to the hostile pricing by its rivals in tier – 1 city and the tactics of land grabbing in lower-tier cities with a bias towards geographical penetration.

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