BEIJING, September 13, 2012 /PRNewswire/ -- Nine Chinese gaming companies have recently joined forces on zhihu.com to blast a Citron Research report, which accused Qihoo's publicized monthly ARPU (average value per user) as being fraudulent. Zhihu has created a Q&A-based social knowledge network that has already become one of the most user-engaging platforms on the Chinese Internet. In a long letter showcasing evidence and proof, the companies justified Qihoo's assessment, and stated that Citron lacked basic understanding of the Chinese gaming market. This echoes a recent denouncement by a group of 65 prominent Chinese business leaders on Citron's distorted reports, which defamed legitimate US-listed Chinese companies. The letter can be read in English here and seen in its original Chinese here.
Since Citron earlier committed to donate 100,000 RMB to any charity designated by anyone who can factually explain and defend Qihoo's gaming revenue claims, these Chinese gaming companies demanded that Citron carry out its promise.
In an effort to form an objective, third-party validation of gaming ARPU, the 9 companies pooled their gaming statistics together. The result reveals that "Citron knows very little about Chinese market and companies, and that its analysis is as amateurish as its claims outrageous," read their letter.
In early September, Internet guru Dr. Kai-Fu Lee initiated a backlash on Citron for its ignorance and deception. He was soon joined by prominent executives and investors, who signed a joint statement to denounce Citron's misleading reports. Their open letter was posted to an English-language website (www.citronfraud.com), created by the group for an ongoing fight against Citron and similar short sellers.
In the past, Citron and other short sellers have helped expose fraud and brought down Chinese companies with problems. However, to manipulate the market and for their own financial gains, they have gone so far as to target legitimate and innocent companies that have minimal or no problems. They deceived investors and got away easily because many American readers know little about the Chinese market.
The Chinese executives and gaming companies are fighting back for the better interest of legitimate US-listed Chinese companies.