In the U.S., speculators have exploded the value of social media companies. In China, you could say the same for propaganda outlets.
On Wednesday, trading was halted on the People's Daily Online, the official Communist Party newspaper, which recently went public. The reason: Investors were buying up the stock too quickly, or as the country's state-run media says, the shares were suspended under rules “aimed at reining in speculative manipulation of share prices." That's a pretty incredible development. Like if PBS.com decided to go public and it's stock went gangbusters. That would never happen in the U.S. because nobody thinks a government-owned website could be the next big thing. But in China, things are different.
“The reason why investors are bullish about the news portal is because of its unique background," Li Weidong, research director at consultancy China Venture, told the People's Daily. "In some investors’ eyes, the state-backed media company’s profits are somehow guaranteed given the support it receives from the government’s preferential policies.”
The idea is that because the People's Daily is spouting off government propaganda 24/7, it will thrive in the country's state-controlled media environment. And so far, the numbers don't lie. As Josh Noble at Financial Times notes, the stock of the People's Daily Online has soared in value since its debut last week. "On the first day of trading alone shares rose over 70 percent. The company now has a market value higher than the New York Times."