The Digital Source For China's Tech Innovation Since 2000

Search
Close

Malicious Inaccuracies In Sohu Commentary

August 15, 2005
Your Letters

Perry Wu's article dated Aug 1, 2005 had some very malicious inaccuracies and a full retraction is warranted.

Mr Wu suggests that SOHU is playing accounting games. But anyone with a basic understanding of accounting principals can see that he is mistaken. Mr Wu insinuates that SOHU is cooking the books. His explanation of why SOHU shareholder equity only increased $1 million while profits were around $12 million was the following. "Sohu has never paid a dividend so the non-increase in shareholders' equity must come from another place. It probably means that Sohu is playing accounting games, using its shareholders' equity accounts to run through expenses that should be run through its profit and loss accounts"

Anyone however doing a few minutes of research will understand however that SOHU repurchased $12 million worth of stock which is the real reason for the change in shareholder equity.

Did Mr. Wu even contact the company before writing this slam article that was completely inaccurate? Perhaps before you let Mr. Wu do another slam piece on a publicly traded company you should require him to take 1 or 2 accounting classes.

To allow Mr. WU to insinuate fraud at a publicly traded company such as SOHU without more due dilligence is irresponsible. I took 2 account classes in college and quickly saw through his errors in mere minutes. Did he not check with anyone??

In fairness, I would encourage you to write a positive article on SOHU. Perhaps you could write an article on the growth of its Sogou search engine which continues to gain users and ranks 60% in market share among new internet users.

Thank you,

Evan Pelham

Carlin Financial

Hello Evan,

Thank you for your message. The Perry Wu writer is a certified public accountant, so we were disturbed by your message and decided to investigate this further after receiving your comments.

At Dec 31, 2004 total undiluted shares outstanding were 36,478,000 and decreased to 36,015,000 so even assuming this was all because of repurchase, then 463,000 were repurchased.

The stock price of Sohu during those six months hovered in the teens around 15-19 dollars. Assuming a price of 17, it cost 17*463,000=7.8 million dollars to repurchase.

So even assuming repurchase, you are still 12 million-7.8 million=4.2 million short of an adequate explanation for where Sohu put it.

You can find the financials around here: http://www.sohu.com/about/English/pdf/050727en.pdf

I hope this answers your questions.

Thank you,

Editor

Tags: accounting | books | college | editor | education | English | finance | financial | financials | fraud | games | HERE | Internet | IT | loss | market share | PDF | profit | repurchase | research | search | search engine | Sogou | Sohu | technology

Other Related News:

Unicom Plans Streaming Video On CDMA 1X

March 30, 2004

Arm's IPO Potentially in Jeopardy Due to Rogue China Unit

February 12, 2022

Access Partners With Datang To Power 3G Data Services In China

July 6, 2004

China Unicom and Huawei Announce New Solutions of the 5G Private Network PLUS Series

May 26, 2022

China Telecom Leases Weida Satellite Links For Energy Project

December 20, 2004

Senators in the United States are pushing for a ban on Chinese crypto-based applications

May 28, 2022

Hong Kong property giant signs crypto company HashKey as tenant

September 16, 2021

China Mobile Urging Nokia To Accelerate TD-SCDMA Mobile Phone Production

February 10, 2009

Primeton Signs Software Platform Contract With Baosight

June 29, 2004
  • Contact Us
  • About Us
  • Corrections and Disclosure
  • Privacy Policy
  • Terms & Conditions
Menu
  • Contact Us
  • About Us
  • Corrections and Disclosure
  • Privacy Policy
  • Terms & Conditions
© 2022 ChinaTechNews.com. A Service of Asia Media Network.
Twitter
Posting....