Investor Jitters on Yandex

Yandex Stock Drops: Moscow, Russia

According to the Moscow News, Russia’s leading search engine, Yandex plummeted in trading on the Nasdaq after the company announced its secondquarter results.
The company’s low operating margin dampened the mood of investors, hungry for BRIC tech stocks. They had previously very high expectations of Yandex, the second Russian internet venture to go public abroad. In May, an IPO valued Yandex at more than $8 billion.
Yandex and Mail Group now have to prove that their successful IPOs are based on stable growth perspectives. Yandex CEO Arkady Volozh said that the company had to significantly increase its spending on infrastructure, personnel and advertising campaigns.

‘Temporary’ losses
Russian analysts said they believed Yandex’s sudden loss was only temporary, associated with growing pains. Troika Dialog’s Anna Lepetukhina predicted that the company would soon be back to normal. The main cause for the drop to $34.23 ($25 was the IPO price) lies in high capital expenditures and low operational profitability, Lepetukhina said.
Yandex’s 42.1 per cent EBITDA margin (unaudited) and more than 30 per cent operating margin, disclosed by the company last week, are better than in many other industries. But investors rushed last week to get rid of the stock, which many of them bought in May.

http://www.themoscownews.com/business/20110801/188890135.html