Take a look at these numbers—straight from the company's SEC (Securities and Exchange Commission) filing:
For the first nine months of this year, it had revenues of a whopping—$35 million.
And Youku's losses are growing. For the first nine months of the year, they were $24.9 million, up from $20.4 million a year earlier. (You have to use a currency calculator to get the year-ago figure; they give that one in Yuan.)
All of this for a company with a $4 billion-plus market cap. (It was actually higher before I discussed this today on The Strategy Session.)
And a company that for all of last year had a negative gross margin.
And a company whose content costs are going... up. They doubled last year.
And did I mention censorship? Youku comes right out and says that “videos and other content” on its website “might be found objectionable” by Chinese authorities.
My take: None of this means it won't eventually grow into its valuation, but for goodness sakes: Buyers, please beware.
Questions? Comments? Write to HerbOnTheStreet@cnbc.com