UPDATE: Goldman Sachs Downgrades Sohu.com to Neutral

On Monday, Goldman Sachs downgraded Sohu.com SOHU from Buy to Neutral. Piyush Mubayi, analyst at Goldman, is concerned about “below-expectation 1Q14E margin guidance...on its gaming subsidiary Changyou's rising sales & marketing expense.” Mubayi believes, “Changyou's recent performance indicates the maturity of legacy games, which has induced exceedingly aggressive SG&A expense for future quarters.” The analyst does not model revenue acceleration in near term as he is “yet to observe meaningful traffic or revenue contribution from Changyou's new mobile initiatives.” Shares opened sharply lower to $73.41 and continued to fall to an intraday low of $72.30. Shares are down about 1.4 percent to $74.06 at last check.