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Monday, July 26, 2021

Shares of Yandex fell 17%, and capitalization by $ 1.5 billion

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Manish Saini
Manish works as a Journalist and writer at Revyuh.com. He has studied Political Science and graduated from Delhi University. He is a Political engineer, fascinated by politics, and traditional businesses. He is also attached to many NGO's in the country and helping poor children to get the basic education. Email: Manish (at) revyuh (dot) com

After the opening of trading on the US Nasdaq, Yandex shares fell 17% due to news that the State Duma could already consider a bill on significant Internet resources in November. The company’s capitalization fell by about $ 1.5 billion – now Yandex is worth less than $ 10 billion.

  • Investors’ behavior may be related to concerns about the bill, which proposes to introduce the concept of “significant information resource of the Internet”, analysts of BCS Broker wrote in their review. According to the bill, which was submitted to the State Duma in July by deputy Anton Gorelkin, such resources will be able to have more than 20% of foreign participation in the authorized capital only with the special permission of the government. 
  • Yesterday, the State Duma announced that they would consider the bill no earlier than November. In the current interpretation, it really creates serious risks for major players, said Leonid Levin, head of the information policy committee. He said the committee’s task is to bring “security” and “investment” closer.
  • Sources at The Revyuh said yesterday that employees of the presidential administration – from its deputy head Sergei Kiriyenko to the heads of specialized departments – have repeatedly appealed to government officials and various ministries over the past few months to support the Gorelkin bill, despite the opposition from technology companies.
  • Today, The Revyuh information, citing its sources, was confirmed by Bloomberg.
  • VTB analysts quoted by Vedomosti note that media reports about the support of the bill in the AP are affecting the capitalization of Internet companies. Even despite the uncertainty of the fate of the Gorelkin project, its very existence and discussion can slow down some business processes in Internet companies and create risks for the Yandex.Taxi IPO, the separation of Yandex.Market and the game business of the Mail.Ru Group, analysts say “The renaissance of capital.”
  • Yandex quotes were already responding to the Gorelkin bill: when the deputy introduced the initiative to the State Duma, the two-day drop in Yandex amounted to 7.4% – this is almost $ 1 billion in capitalization. Before that, Yandex collapsed by more than 20% in October 2018, when information appeared that Sberbank was planning to buy out a stake in the company.
  • Gorelkin’s bill puts at risk not only Yandex, but Mail.Ru Group. But at the same time, the shares of the latter do not suffer so seriously: on the London Stock Exchange, they lost only 1.32%, Vedomosti writes.
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