Why AutoNavi Shares Plunged
Dec 6th 2012 4:39PM
Updated Dec 6th 2012 4:42PM
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of AutoNavi (NAS: AMAP) have plunged today by as much as 14%, as auditor probes surrounding Chinese companies scare off investors.
So what: The mapping data provider got crushed the most out of a handful of Chinese stocks that could potentially be affected. The SEC has accused the Chinese divisions of the four large accounting firms of withholding documents that could be evidence of possible fraud.
Now what: There are nine unnamed companies involved in the investigation, and investors are afraid that AutoNavi could be one of them. It's possible that some companies could be forced to delist from domestic trading, which would be a major blow to the entities, along with their investors. Although the chances of this happening are very small, investors seem to be taking a better safe than sorry approach.
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