Sohu.com (SOHU) - Another Hit Earnings and Gaming Unit IPO Spinoff

Another quality quarter from Sohu.com (SOHU) and an interesting ploy to extract value from the market by a proposed IPO of its gaming unit Changyou.com. As in the recent past [Apr 28: Sohu.com Crushes Estimates - Up 15%], the advertising arm did well but the gaming arm did stupendous. This should bode very well for our pure play Chinese gaming stock Perfect World (PWRD). I cut back the position recently ahead of earnings as I normally do... the stock is up 4-5% in pre market, despite crushing earnings estimates. Frankly it's a bit disappointing to see such a lack of response, but not surprising anymore. We'll see if it can hold for the next week or if the market will steal away all it's gains, despite lack of exposure to subprime, oil, or the U.S consumer.

I should also note that last we noticed China passed the United States in terms of internet users. Penetra...