I am not as obsessed by the Youku.com (YOKU) as it currently appears; I am just fascinated by human herding behavior. And I can't recall a valuation like this since 1999... I recall a lot of high growth tech stocks trade at 3-4x sales.... and a lot of high value takeover prices are at 6-7 sales. At the peak this morning of $50, investors were giving this company a $5 billion valuation.... or 100x sales.
It's all fun and games until someone pokes your eye out with a pirated copy of Jersey Shore ("so this is how the Americans live!? A Snooki would be shunned in China. We're sending our money to these people? What a Situation!") Once these things turn it is a game of musical chairs... the music stops, and suddenly you realize there are only so many bathtubs full of Kool Aid to sit in. The stock is down more than 20% from the high of the day and 7% for the session. The pathetic thing is this could drop 90% from the high of the day and still be considering expensive by normal valuation methods.
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