Leju (LEJU), an online real estate site in China, is down $2 to $12 today after it reported earnings.
The reason for the loss is the company announced 2014 revenue will likely come in at $470-490 million, down from its earlier estimate of $500-520 million. “The secondary market has experienced significant challenges this year, which has had a negative impact on our listing services revenue”.
$128 million is what the company did in revenue last quarter. So this now means no quarter-over-quarter growth. Also, in 2013 Q4 the company did $126 million. So this now means no year-over-year growth either.
And this probably isn’t the end if it. China’s real estate market has been in a recession for months, and it doesn’t look to be coming out anytime soon (obviously its getting worse as LEJU just had its 1st real warning today). This is a little company, and its business, might not bounce back as quick as we hope. Also, business could deteriorate more, and the trend is our friend and right now the trend is down.
I’ll be selling LEJU from all client accounts today. I purchased the stock a few months ago at $18 and now its $12, so that will be around a 33% loss. But this will free funds for new stocks that have more positive outlooks.
