Hedgeye analyst Felix Wang added Chinese gaming giant NetEase (NTES) to his “Best Idea” Short list two weeks ago, just as it reached its 52-week high approaching $119.
The stock has fallen over 10% since then.
“I do believe investors’ concerns on some high-profile games of theirs like Eggy Party – which is a critical part of my short thesis – may be finally happening,” Wang explains in this clip from The Call @ Hedgeye. “I see a lot of concerns in terms of longer-term monetization with that game in addition to competition coming on.”
“This is a Wall Street darling, there are no sell ratings,” Wang adds. “It has performed really well this year, but I do think the good times are going to end, particularly going into next year.”
Click above to watch the full clip.