Baidu's stock surges in second day of US tradingAugust 9, 2005 
Baidu's stock soared as much as 26 percent in its second day of US trading. The stock rallied almost fivefold on Aug. 5 after its initial public offering, marking the biggest IPO debut in more than five years and the largest U.S. offering of a foreign company on record. The surge underscores parallels investors drew between Google and Baidu.com's future growth. Baidu.com raised $109 million, 40 percent more than it initially sought, as investors seek to profit from China's 100 million Web users. Google, the world's most- used search engine, owns about 2.6 percent of Baidu.com. ``It's shocking to see a company trading at such a high multiple so early in its life cycle,'' said Paul Bard, an analyst at Renaissance Capital in Greenwich, Connecticut. ``The stock price right now is pretty much implying that Baidu is going to grow 100 to 200 percent a year for at least the next five to 10 years.''  American shares of Beijing-based Baidu.com, each representing one Class A share, jumped $15.36 to $137.90 at 1:58 p.m. New York time in Nasdaq Stock Market composite trading, with 11.9 million shares changing hands. The stock earlier touched $153.98, giving the company a market capitalization of almost $5 billion. Li and Eric Xu, Baidu's two founders, sold shares in the IPO. Li still holds 7.3 million shares, worth about $1 billion and Xu, who is no longer with the company, holds 2.2 million shares, worth about $306 million. Investors expect Baidu.com to perform as Google did, said Bard, who doesn't own Baidu.com shares. Google's revenue ballooned to $3.19 billion in 2004 from $19.1 million in 2000, and the stock has more than tripled since being offered to the public last year. That growth may be tough to replicate. Baidu.com faces more competition from established companies than Google did in 2000, as well as changing censorship regulations by the Chinese government and the immature market for online advertising in China. Baidu.com accounts for 37 percent of the Chinese search market, according to Analysis International Ltd., a Beijing-based researcher. Google had 23 percent and Yahoo, 21 percent. ``I don't believe money can buy the leadership position in the search space,'' Li said on an Aug. 5 conference call. ``Microsoft has more money than anyone, but they are not No. 1 in this area.'' The company is ``not afraid of change'' in regulations in the Chinese search market, Li said. Li and Xu are Chinese citizens who were educated in the U.S. Li got his masters degree in computer science from the State University of New York in Buffalo and was an engineer at search engine Infoseek Corp. before returning to China to found Baidu.com. ``A deal like Baidu just puts a white hot spotlight on the IPO market,'' said Ben Holmes, a principal at Protege Funds Inc. ``Suddenly the brokers themselves are experiencing calls from clients saying, `Put me in the IPO market.''' Baidu.com may be getting a boost from a Forbes report that Yahoo! Inc. is in talks to buy a 35 percent stake in Alibaba.com, China's biggest online commerce company, for almost $1 billion, said Sal Morreale, a sales trader at Cantor Fitzgerald & Co., who follows new issues and wasn't involved in Baidu.com's offering. Yahoo China spokeswoman Celia Pan declined to comment on the report. Joanna Stevens, a U.S.-based spokeswoman for Yahoo, didn't return a call seeking comment. Porter Erisman, Alibaba's spokesman in Shanghai, didn't respond to an e-mail query. ``This is an extremely unique situation that I don't think you're going to see for a long time,'' said Morreale, who is based in Los Angeles. Comparisons to Google and demand from retail investors are driving the shares, he said. Investors ``want to tap China's consumer market with so many people getting online in China -- Baidu.com is one way to reach them,'' said Chip Zhu, who manages the $45 million Gartmore Global Technology and Communications Fund in West Conshohocken, Pennsylvania, and owns shares of Baidu.com. Google's minority stake ``validates their credibility.'' Baidu.com's market value is more than 2,500 times its 2004 profit. That compares with a ratio of 75 for Google and 71 for Yahoo, the most-visited Web site, according Bloomberg News data. Zhu said that if the shares fall, becoming less expensive, Google might buy Baidu outright. Source: Bloomberg News  Read Serge Thibodeau's daily blogs on search engines at Serge Thibodeau Live. We strongly suggest you bookmark our web site by clicking here.  Tired of receiving unwanted spam in your in box? Get SpamArrest™ and put a stop to all that SPAM. Click here and get rid of SPAM forever! Get your business or company listed in the Global Business Listing directory and increase your business. It takes less then 24 hours to get a premium listing in the most powerful business search engine there is. Click here to find out all about it. Rank for $ales strongly recommends the use of WordTracker to effectively identify all your right industry keywords. Accurate identification of the right keywords and key phrases used in your industry is the first basic step in any serious search engine optimization program. Click here to start your keyword and key phrase research.
You can link to the Rank for Sales web site as much as you like. Read our section on how your company can participate in our reciprocal link exchange program and increase your rankings in all the major search engines such as Google, AltaVista, Yahoo and all the others. Powered by Sun Hosting Sponsored by Avantex Traffic stats by Site Clicks™Site design by Mtl. Web D. Sponsored by Press Broadcast Sponsored by Blog Hosting.ca Call Rank for Sales toll free from anywhere in the US or Canada: 1-800-631-3221
email: info@rankforsales.com  | Home | SEO Tips | SEO Myths | FAQ | SEO News | Articles | Sitemap | Contact | Copyright © Rank for Sales 2003 Terms of use Privacy agreement Legal disclaimer Ce site est disponible en Français |
