Netease (NTES) NewsBite - Netease Gets Hit with New Chinese Tax Rules

Posted on Thursday, May 22, 2008 10:57 AM

Netease Com Inc (NTES) opened at 23.24. So far today, the stock has hit a low of 22.02 and a high of 23.52. NTES is now trading at 22.54, down 1.51 (-6.5%). The stock hit its 52 week high of 25.70 earlier this month and set its 52 week low of 13.45 in August. After a sharp rise between March and the middle of May, the stock has been falling over the past week. The company announced first quarter EPS late yesterday, and showed a decline in its first quarter profit, as the company fell victim to new changes in the Chinese tax laws which resulted in the company having to pay higher taxes than it previously had to deal with. Technical indicators for the stock are bullish and slightly deteriorating. If you’re looking for a hedged play on this stock, consider a June bear-call credit spread above the $25 range. NTES stock could rise up to 10.9% before expiration and this position would still be profitable. [RHF- Seven Summits Strategic Investments NewsBite]