The steep share price losses of mainland Internet portals Sohu .com and Netease.com are choking off the initial public offering (IPO) route for other mainland Internet plays and forcing a reassessment of the market.
Even though investors may demand more from the mainland's Internet stocks in the months ahead, they will not close the door on every entrepreneur.
'The Internet market is not dead in mainland,' said Peter Hitchen, regional Internet analyst at Salomon Smith Barney in Singapore. 'What we are seeing is not just specific to mainland.'
A major factor in the mainland's cloudy Internet picture is Nasdaq. Last month looked uncomfortably like April when technology shares on the United States market took a sharp blow. Renewed worries over US interest rates adds to the uncertainty, and investors are running for cover.
'We are in the fear phase of the cycle,' said David Cui, Internet analyst at Merrill Lynch in Hong Kong, referring to the saying that the stock market runs on fear and greed. The market for IPOs may not be dead, but it is among the walking wounded.
DangDang.com, an online bookseller, postponed a planned offering. Executives said the decision was made at the request of backers International Data Group (IDG) and Softbank China Venture Investments amid concerns the market was too unstable.