Beijing-based Elong dropped 0.9 percent as of 2:52 p.m. in New York. Trading volume was more than four times the full-day average of the past three months. The Bloomberg China-US Equity Index slid 1.3 percent to 107.05 in the steepest decline since April 25.
The ADRs surged 20 percent last week amid speculation that the company might be bought by one of its larger rivals as competition intensifies in China’s online travel-booking industry. Shenzhen-based Southern Metropolitan News reported on July 3 that Ctrip.com International Ltd. was planning to acquire Expedia’s stake through a share swap, citing an unidentified person with knowledge of the matter.
Expedia, the U.S.-based travel website that owns about 65 percent of Elong, said in a statement today that it remains a long-term investor and supports the company’s “drive to become the leading Chinese travel site.” The company noted what it called “certain inaccurate rumors reported in Chinese media” relating to its majority ownership.
Bellevue, Washington-based Expedia’s statement “clearly helped send Elong shares down,” Jeff Papp, senior analyst at Oberweis Asset Management Inc. in Lisle, Ill., said by e-mail. “Consolidation is still likely to occur in China’s online travel space.”
Elong fell to $21.43, paring this year’s gain to 4.6 percent. Ctrip, China’s biggest online travel agency, declined 1.8 percent to $63.75, reducing the rally in 2014 to 28 percent. Qunar Cayman Islands Ltd., a travel site controlled by Baidu Inc., slid 1.2 percent to $27.97, trimming its advance this year to 5.4 percent.
The iShares China Large-Cap ETF, the largest Chinese exchange-traded fund in the U.S., slumped 0.3 percent to $38.33. The Standard & Poor’s 500 Index lost 0.4 percent as investors weighed valuations and speculated that the Federal Reserve may raise interest rates sooner than expected.
China’s Premier Li Keqiang said yesterday the economy still faces downward pressure at a press conference with German Chancellor Angela Merkel, adding the government won’t adopt “strong stimulus.”
LightInTheBox Holding Co., which sells Chinese-made goods to customers overseas, sank 7.7 percent to $6.38 in the largest retreat since April 28. E-Commerce China Dangdang Inc., an online retailer based in Beijing, dropped 4.6 percent to $12.67, falling the most in two weeks.
The Hang Seng China Enterprises Index was little changed at 10,487.34 after rising in the previous four days. The Shanghai Composite Index climbed less than 0.1 percent to 2,059.93.