Cheetah Mobile Inc (NYSE: CMCM) had a rough go in the market as of late as two articles raised concerns about the company. However, after publishing a response to the articles late yesterday, the stock is working its way back up. Today, we’ll talk about:
- The news;
- what we’re seeing from CMCM stock as a result; and
- what we’ll be watching for ahead.
CMCM Gains On Response To Articles
As mentioned above, Cheetah Mobile is having a strong day today, making up for some of the recent declines on the stock. The declines came as news was published on BuzzFeed both Monday and Yesterday with regard to the attribution of application installations.
In the response, CMCM said that around 97% of its revenue from its utility apps int eh overseas market are contributed by dozens of third-party advertising platforms through SKDs. The remaining 3% of these revenues are from SDK developed by the company itself, representing less than 1% of the company’s total Q3 revenues.
The company also made it a point to remind investors that it has no control over third party advertising platforms. This is key as the BuzzFeed articles pointed to alleged click injections. However, the company said that it has no intention nor ability to direct such advertising platforms to engage in the alleged click injections.
CMCM went on to say that due to the overwhelmingly contributions of revenue from third party platofrm, it has no reason to engage in these types of activities. The company closed the release stating that there were numerous untrue and misleading statements made in these articles. As such, it will be taking legal action against responsible parties.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of Cheetah Mobile, the news proved to be overwhelmingly positive. With the press release, the company debunked allegations and took a strong stance against the parties involved that have led to a drastic decline in share value. So, it’s not surprising to see that excited investors are leading the stock toward a recovery. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (12:07), CMCM is trading at $6.78 per share after a gain of $1.31 per share or 23.93% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on CMCM. In particular, we’re interested in seeing if there is another BuzzFeed article in response and following the company’s actions toward those who they allege spread misleading information. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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