The Chinese dating app and live-streaming service Momo has increased in value after a late 2017 dip.
Investors were worried about a government clampdown on live-streaming video platforms after regulators declared they were “harmful to social morality”.
Its valuation dropped from $40 in mid-2017 to nearly $20 by late November.
An analyst at investorplace.com, however, reports that the legislative concerns affecting the downgrade may have been overblown.
China is likely to work on making sure content that it deems inappropriate doesn’t end up being streamed, but the medium should survive any new restrictions.
In June, for example, the Chinese Ministry of Culture shut down a number of apps which were hosting pornographic content.
The implication is that Momo should continue to grow so long as it plays by the rules.
Investors seem to have cottoned on to the potential, with MOMO stock up 40% since early December.
Earnings, released in under a month, may completely allay any residual concerns and cause the stock to surge in value.
There is a chance that Momo Inc stock is trading at a depressed valuation, meaning catch up buying would inflate the price.
The analyst concludes: “If you’re looking for a way to play China’s big internet boom but don’t want to pay an insane multiple, this stock is the way to go.”
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