These Stocks Couldn’t Maintain Momentum, Either: Diamond Foods, Inc. (DMND), Perfect World Co., Ltd. (ADR) (PWRD)

I’ve noted on numerous occasions I’m not a fan of the free-to-play/pay-to-play-more online gaming business model, and I believe the moves by Glu Mobile Inc. (NASDAQ:GLUU) and Zynga Inc (NASDAQ:ZNGA) into online gambling operations proves the freemium model is dying. And though Perfect World Co., Ltd. (ADR) (NASDAQ:PWRD) may be enhancing its future offerings, it doesn’t make much sense to neglect its current offerings as it did. I’d still pass on this gamer.

Searching for an answer
After Yandex reported that insiders, including its company founders, were planning to unload a ton of stock in a secondary offering, shares of the Russian search engine tumbled, but as the Fool’s Brian Stoffel notes, it may be much ado about nothing. Venture capitalists, who are part of the selling clique, often eventually want to get out of their investment after an IPO — Yandex went public in May 2011 — and though the company founders are selling a large tranche of stock, they’ll continue to own more than 13% of the company, a still sizable stake.

Analysts believe the sell-off was overdone, and with the possibility of a dividend payment in the future because of the large cash position it holds, they maintain its stock remains attractive, particularly at this lower level.

I noted last month that Yandex has a 60% share of the market in Russia and it has expansion plans to grow into other countries, putting it in a good position to capitalize on having surpassed Microsoft Corporation (NASDAQ:MSFT)‘s Bing to become the fourth largest global search engine behind Google Inc (NASDAQ:GOOG), Baidu.com, Inc. (ADR) (NASDAQ:BIDU), and Yahoo! Inc. (NASDAQ:YHOO)

The article These Stocks Couldn’t Maintain Momentum, Either originally appeared on Fool.com and is written by Rich Duprey.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Baidu, Google, and Yandex and owns shares of Baidu, Google, and Microsoft.

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