A US shareholder is seeking a class action lawsuit against Chinese game operator, The9, over its financially devastating loss of a contract to host World of Warcraft in the country. The lawsuit alleges The9 made numerous false and misleading positive statements to shareholders regarding the company's health and status of …
good luck with that
Hmm maybe there is a reason why few investments carry the risk of a small company in an emerging market like China. Of course the transparency in China is crap and lying hell you are lucky if you don't invest in a company in this market that poisons infants to get ahead. You expect this in such a market and I bet this idiot wasn't saying crap when the stock was going up like a rocket a few years ago. No sympathy whatsoever. Now we need to do a better job of making sure this crap doesn't happen in the developed western markets so we maintain our edge and keep the jobs where people care somewhat about things like human rights, the environment, and labor laws.
Business in China
Yeah, companies in China (not all of them of course, but a lot) are run by greedy, short sighted people, who's ethical values fall short of a rats. I've known many people come here with the hope of making money, only to be fleeced by their so called Chinese 'partners' who are after a quick buck.
I have more info about living and working in China on my blog:
It's possibly to make money here, but you have to know the market, and you MUST have a totally reliable local partner. Really, like your spouse or something. Either that or be a multinational company.
So, his capitalistic investment in communist China didn't work out so well? Shocking. I tend to invest my money in countries where I can drink the tap water and that have something resembling freedom of speech and of the press. Why invest in a country where even their business news is reviewed by a political officer before being printed?
... their practices are just like any other company's then?
"You cannot cast that spell right now...."
"you are lucky if you don't invest in a company in this market that poisons infants to get ahead."
While this maybe true, I don't think US companies are much better. Coca Cola were ion trouble in Belgium for selling "poisoned" drinks a few years ago.
Back to the story: Being "optimistic" with the truth seems fairly common practice and as the guy knew that 90% of the business was based on a contract which was up for renewal he should have taken The9 assurance with a large pinch of salt.
communisum is dead?
sounds like china is whole-heartedly embracing capitalist business models from the looks of things.
there is no way we can hold this up as an example of "china is crap", when we in the western world are just as guilty.
there are however, plenty of much more disturbing things going on in that part of the world than some stock holders doing some insider dealing and world of warcraft changing their server provider as a result.
just my 2 pence.
here in the UK all investment advisors are obliged to ensure you understand that the value of your investments can go down as well as up.
Frankly taking an investment like this is just a glorified punt, he would have been better off having a spread bet on a game of 'merkin football
Amazing the level of naivete in some executives--all they need are assurances at board meetings before risking the livelihood of their stockholders.
About the only thing a lawsuit in China accomplishes is to alert the various authorities were the money went, for purposes of recovery of course!
@ Matt 21 @asdf
asdf: "you are lucky if you don't invest in a company in this market that poisons infants to get ahead."
Matt 21: While this maybe true, I don't think US companies are much better. Coca Cola were ion trouble in Belgium for selling "poisoned" drinks a few years ago.
Very true Matt. Unethical and frankly immoral behaviour is not unique to Chinese companies.
Let's cite the example of Bayer. First, they sold HIV contaminated blood products for haemophiliacs. Then, when they could not sell the HIV laced products in the West, internal memos show that company sold the excess contaminated stock to Asian and Latin American markets as a "new heat treated product" that was free of HIV. (see http://en.wikipedia.org/wiki/Contaminated_haemophilia_blood_products for a starter article).
And there is Pacific Gas and Electric, the subject of the Erin Brockovich movie, which contaminated a whole town with hexavalent chromium, then lied to them, telling them that chromium is in multivitamins. True, but hexavelent chromium is not the same chromium in pills!
And of course, big tobacco, who have for years retained a retinue to lawyers, doctors, scientists and lobbyists to make huge profits on a product that they knew was harmful.
So in the end, you have to say that some Chinese companies are merely learning from the dubious strategies of some Western companies. Nothing surprising about that. And try to keep the Sinophobia to a minimum.
>So in the end, you have to say that some Chinese companies are merely learning from the dubious strategies of some Western companies. Nothing surprising about that. And try to keep the Sinophobia to a minimum.
I am not going to defend the business practices western companies because for one thing most of them have moved into China with reckless abandon just to embrace the wild west anything goes got to make a billion doesn't matter who dies next quarter statement only thing that matters attitude. I just have a problem with anybody that thinks doing business in China is exactly like doing business in Western Europe or USA and expects the same rules. The fact is they still have a communist government that was setup by Mao (quite the economical genius he was killing 40 million of his own people through starvation, etc). Investors need to remember China could nationalize everything overnight, cash in and what could you do about it?