In focus: QIHU

I discovered Qihoo through, as you know it, CNBC's show Mad Money featuring hedge fund manager Jim Cramer. As much as I'd like to, I do not follow the IPO calendar avidly. As far as influence goes, Jim Cramer's show expresses  direction, and leaves the decision to us. I quickly planted the name in my head  because of its association.

The trend of "Internet+China+IPO=success" is anything but pragmatic, its predecessors have been gaining substantial stock growth. Baidu, the Google of China, currently trades 138 under the ticker BIDU. That is a 230% increase from a year ago at 60. Youku.com, the Youtube of China, currently trades 49.35 under the ticker YOKU. That is almost a 50% increase and it only came out in December. Dangdang, the Amazon of China under ticker DANG, was released round the same time. Although DANG is down 45%, we all know the success Amazon in the U.S. has. Yes, domestic derivative potential. Now where does Qihoo fall under?

Immediately, I headed to renaissancecaptial.com and saw the description: "Offers a safe web browsers and other Internet security products in China." Underwriters include UBS Investment Bank and Citi. Obviously, that wasn't enough information. So, like any other procedure, I googled it. This company had a net profit of $8.5 million, doubling from the year before. That alone was impressive. Subscription base of 338 million user penetration of with 70% Chinese internet users. China has the largest user base in the world. The company's revenue growth in advertising has grown substantially to $14.13 million. Okay, I was sold.

My experience with this stock is better than some. On Wednesday, I placed a limit order of $25 to be safe in order to be one of the first buyers upon release. Underwriters estimated a $12-14 price. Then rumors circulating said it was going to be 40% oversubscribed to the low 20's.  I gave it a $5 cushion and waited. At 7am PST, the stock became available, but it opened at $29?! I instantly got a market order at $30 kicking myself. Within the first hour, it had grown to $32. As a day trader, this looked an appealing exit point. However, I decided to stay in the mix. It paid off because it closed at $34 after locking in a percentage of that profit. The next day, it closed at $29. Today, it closed around the same level.

I'm scratching my head because of the positive data that Friday's reports promised. Decrease in unemployment to 8.8%, Asian markets up, gas prices lower. I thought the dust had finally settled when the price was gradually increasing intraday. Suddenly, gas prices increased to a new high and the market turned upside down.

With a lack of data coming next week, relying on headlines native to the stock and volume doesn't prove appealing. The week after that is going to be heavy, though. International trade, PPI, retail sales, and industrial protection reports all come out on the same week.  Multiple earnings from large caps are due. There will be much more movement in the following month, and expect Qihoo's publicity expanding to more retail investors during the weekend. I'll HOLD this stock and give it a $40 rating.