UPDATE: Maxim Group Downgrades Youku Tudou to Hold on Post-Merger Concerns

Maxim Group reduced its rating on Youku Tudou

from Buy to Hold and removed its previous price target of $24 per share. Maxim Group noted, "At the end of August, YOKU completed its acquisition of Tudou, once YOKU's largest competitor. As previously analyzed, we believe the combination of the two largest online video operators in China will likely enforce YOKU's market leadership, ease the pressure of content cost inflation, and increase YOKU's pricing power among advertisers. However, we are also concerned about the effectiveness of post-merger integration, the extent of user coverage overlap (14% based on YOKU's disclosure), and the immediate impact of consolidating two companies' financial statements to YOKU's prior agenda of breakeven." Youku Tudou closed at $17.56 on Wednesday.