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August 1, 2023
Charles Zhang
Chief Executive Officer
Sohu.com Ltd
Level 18, Sohu.com Media Plaza
Block 3, No. 2 Kexueyuan South Road, Haidian District
Beijing 100190
People s Republic of China
Re: Sohu.com Ltd
Form 20-F for the
Fiscal Year Ended December 31, 2022
Filed March 30,
2023
File No. 001-38511
Dear Charles Zhang:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 20-F for the Fiscal Year Ended December 31, 2022
Risks Related to Our Ordinary Shares and ADSs, page 41
1. We note your discussion
of the Company s potential status as an investment company
under the Investment
Company Act of 1940 (the 1940 Act ), and in particular your
disclosures regarding
the Company s investments in certain instruments that may be
investment securities
for purposes of Section 3(a)(2) of the 1940 Act. Please provide a
legal analysis of
whether the Company meets the definition of investment company
under Section 3(a) of
the 1940 Act. Please include in your analysis all relevant
calculations under
Section 3(a)(1)(C) on an unconsolidated basis, identifying each
constituent part of the
numerator(s) and denominator(s). Please also describe and discuss
any substantive
determinations and/or characterizations of instruments, assets or asset
classes that are
material to your calculations. Additionally, if the Company meets the
Charles Zhang
FirstName LastNameCharles Zhang
Sohu.com Ltd
Comapany
August NameSohu.com Ltd
1, 2023
August
Page 2 1, 2023 Page 2
FirstName LastName
definition of investment company under Section 3(a) of the 1940
Act but relies or
intends to rely on an exclusion therefrom or a relevant exemption,
please provide a legal
analysis supporting such reliance.
Governmental Regulations and Legal Uncertainties, page 71
2. Please state affirmatively whether you: (i) have been required to
obtain any permission
from or complete any filing with the CRSC, and (ii) have been required
to go through a
cybersecurity review by the CAOC. If so, state affirmatively whether
you have received
all requisite permissions or approvals, or whether any have been
denied. If you have
determined that no permissions are required, please clarify your basis
for such
determination, including whether you relied on the opinion of counsel.
Item 16I. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections,
page 148
3. We note your statement that you reviewed your register of members and
public filings
made by your shareholders in connection with your required submission
under paragraph
(a). Please supplementally describe any additional materials that were
reviewed and tell us
whether you relied upon any legal opinions or third party
certifications such as affidavits
as the basis for your submission. In your response, please provide a
similarly detailed
discussion of the materials reviewed and legal opinions or third party
certifications relied
upon in connection with the required disclosures under paragraphs
(b)(2) and (3).
4. In order to clarify the scope of your review, please supplementally
describe the steps you
have taken to confirm that none of the members of your board or the
boards of your
consolidated foreign operating entities are officials of the Chinese
Communist Party. For
instance, please tell us how the board members current or prior
memberships on, or
affiliations with, committees of the Chinese Communist Party factored
into your
determination. In addition, please tell us whether you have relied
upon third party
certifications such as affidavits as the basis for your disclosure.
Consolidated Financial Statements
Notes to Consolidated Financial Statements
13. Goodwill, page F-41
5. Clarify more specifically how you determined the fair value of your
Sohu reporting unit
using the income approach and the market approach. In this regard, we
note your
disclosures in Note 4 indicate that your Sohu reporting unit has
incurred operating losses
for the past three years. Clarify the significant assumptions made
with respect to future
revenue and expenses and why you believe these assumptions are
reasonable considering
your historical results. We also note that your market capitalization
has been below your
book value for a sustained period. Tell us how the fair value of your
reporting units
reconciles to your market capitalization. Please also tell us how you
considered including
the following disclosures relating to the fair value of your Sohu
reporting unit.
Charles Zhang
Sohu.com Ltd
August 1, 2023
Page 3
The percentage by which fair value exceeded carrying value as of
the date of the most
recent test;
A description of the methods and specific key assumptions used,
how the key
assumptions were determined, and how they took into consideration
the factors noted
above;
A discussion of the degree of uncertainty associated with the key
assumptions. The
discussion regarding uncertainty should provide specifics to the
extent possible (e.g.,
the valuation model assumes recovery from a business downturn within
a defined
period of time); and
A description of potential events and/or changes in circumstances
that could
reasonably be expected to negatively affect the key assumptions.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Laura Veator, Senior Staff Accountant, at (202)-551-3716
or Stephen
Krikorian, Accounting Branch Chief, at (202)-551-3488 with any questions.
Please contact
Jennifer Gowetski at (202) 551-3401 or Jennifer Thompson at (202) 551-3737 if
you have any
questions about comments related to your status as a Commission-Identified
Issuer during your
most recently completed fiscal year.
Sincerely,
FirstName LastNameCharles Zhang
Division of
Corporation Finance
Comapany NameSohu.com Ltd
Office of
Technology
August 1, 2023 Page 3
cc: Tim Bancroft
FirstName LastName