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    Stock Alert for Ku6 Media Co. Ltd. (KUTV)

    Ku6 Media Co. Ltd. (KUTV) is a leading Internet television company in China. Through its premier online brand and online video Web site, www.ku6.com, KUTV provides video information services and entertainment in China.  www.ku6.com provides a video platform for sharing and watching user-generated content. It also provides online video reports and other interactive entertainment programs for its users.

    Share Statistics (17-Jan-12)   FY

    2009

    FY

    2010

    %

    Chg

    Q3

    2010

    Q3

    2011

    %

    Chg

    Symbol KUTV Revenue, $Mn 1.04 16.56 1492.3% 4.27 4.23 -0.9%
    Current price $3.30 Gross marg. 46.2% -144.3% -412.3% -123.7% -29.6% -76.1%
    52wk Range: $0.75-$8.12 Oper. margin -323.8% -296.2%
    Avg Vol (3m): 28,184 Net margin -2249.0% -311.1% -86.2% -300.7% -306.9% 2.1%
    Market Cap. 165.65M              
    Shares Outstanding 50.20M EPS, $ 0.00 -0.02 0.00 0.00

    Source: Reuters.com, SEC Filings.

    Investment Highlights

    Shares of Chinese Internet television company Ku6 Media Co. Ltd. (KUTV) were boosted on news the Company has inked a definitive deal with YouTube allowing KUTV’s international users to view original videos from China through a new channel operated by the video-sharing giant. The stock leaped as much as 192.8% after the announcement, with strong volume of 4.38 million shares traded.

    KUTV shares have risen 197.3% in the last five days and 236.7% in the last month.  Year-to-date, the stock is down 30.5%.

    KUTV, in a statement, said it believes the partnership will allow it to expand its content offering into the international market.  To boost its user base and revenues in the international market, the Company intends to recruit a team to operate the channel.

    KUTV investors had previously welcomed the news that the Company’s board has authorized  the Company to repurchase up to an aggregate of $3.2 million of its outstanding American Depositary Shares (ADS).  Jeff Shi, CEO of KUTV, commented that program reflects the Company’s confidence in the future outlook of its business and its long-term value.

    Shares of KUTV added $1.92, or 139.1%, to close Tuesday’s trade at $3.30.  Over the last 52 weeks, the stock has ranged from a low of $0.75 to a high of $8.12.  It is currently above  its 50-day moving and 200-day moving averages of $1.10  and $1.94, respectively.

    Source: http://www.mzcan.com/us/KUTV/irwebsite/index.php?mod=announcements

    Financial Summary

    KUTV reported total revenues from continuing operations of $4.2 million for the third quarter ended September 30, up 5% from $4.0 million in the second quarter of 2011, and down 2.3% from $4.3 million in the corresponding quarter of the prior year.  Performance advertising revenue increased continuously and accounted for 72.3% of total revenue in the quarter, as compared to 19.9% in the second quarter of 2011.

    The Company realized a net loss from continuing operations of $13.0 million, down 39.8% from a loss of $21.6 million in the second quarter of 2011, and up 2.4% from a loss of $12.7 million in the third quarter of 2010.

    Net loss attributable to KUTV per basic and diluted ADS was $0.26 in the third quarter of 2011, compared to $0.61 in the second quarter of 2011 and $0.40 in the third quarter of 2010. Weighted average ADS used to calculate diluted net loss per ADS was 50.2 million ADS in the third quarter of 2011, 35.2 million ADS in the second quarter of 2011 and 31.9 million ADS in the third quarter of 2010.

    As of September 30, 2011, the Company had $41.6 million in cash and cash equivalents, compared to $111.4 million as of June 30, 2011.  KUTV attributed the significant drop in cash and cash equivalents to the redemption of senior convertible bonds of $50 million from Shanda.

    Source: http://finance.yahoo.com/news/Ku6-Media-Reports-Unaudited-prnews-3929855851.html?x=0&l=1

    Financial Strength (17-Jan-2012)

    Company

    Industry

    Sector

    S&P 500

    Quick Ratio (MRQ) 1.52 1.12 1.39 0.76
    Current Ratio (MRQ) 1.52 2.97 2.75 1.12
    LT Debt to Equity (MRQ) 12.99 14.44 108.78
    Total Debt to Equity (MRQ) 3.85 19.09 23.26 146.95
    Interest Coverage (TTM) 0.94 1.67 26.13

    Source: Reuters.com, SEC Filings

    Technical Analysis

    Source: http://stockcharts.com

    KUTV is above the upper Bollinger Band, implying that it is currently extended from its recent trend. Be aware, however, that a cross outside of the Bollinger Bands can sometimes be a signal of trend strength and not, necessarily, trend reversal.

    The MACD for KUTV currently indicates a strong bullish signal for two reasons. First, the MACD is above the signal line, a 9-day moving average. Second, the MACD is above 0, which implies that the underlying moving averages are trending higher.

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    Jan-17-2012 symbol Share, $ $ Mn 2011 2012 2011 2012
    Youku Inc. YOKU 18.98 2.17B n/a n/a 15.50 8.30
    Tudou Hldg Ltd. TUDO 11.83 182.98M n/a n/a n/a n/a
    SINA Corp. SINA 61.20 4.03B 65.81 42.21 8.67 6.94
    Baidu.com Inc. BIDU 128.85 44.97B 46.68 28.44 19.99 12.85
    Internet Information Providers Median       27.40 n/a 1.92 n/a
    Ku6 Media Co. Ltd. KUTV 3.30 165.65M n/a n/a n/a n/a

    Source: Thomson Financial

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