Baidu love
Baidu.com, China's largest Web search company, had an exciting Nasdaq debut Friday with shares almost quadrupling in a surge that surprised even the most optimistic market analysts. Shares closed at $124, a huge gain from the initial offering price of $27 per American depositary share.
Bloggers quickly tried to make sense of it all, some attributing the phenomenon to comparisons between the Beijing-based company and search leader Google, which owns 2.6 percent of Baidu. Others are calling the stock overvalued, noting that China accounts for just a tiny fraction ($150 million) of the $8 billion global search market. And others say the price surge shows how China is becoming the next great Internet marketplace. China is the world's second-largest Internet market with about 100 million users.
The 5-year-old company's name comes from an ancient Chinese poem about a man in search of love. With Friday's performance, he's likely to have many suitors.
Blog community response:
"With such an explosive performance, Baidu's debut is very 1999. And just as the dot-coms that rocketed upward in those days of the Internet bubble quickly fell to earth, Baidu is getting a big short-term boost from investors who have fallen in love with a good story. "
--Business, Investment and China
"Baidu's first day of trading is actually quite scary. The valuation is so out of whack with the company's underlying fundamentals as to make you wonder whether we are approaching another speculative top...It is however a terrific marketing event. Who in the world doesn't now think Baidu is China's Google, even though Google is still really China's Google?"
--Billsdue
"This brand of capitalism makes Silly Valley look dull by comparison...Let's just hope that this isn't the one deal that we all point to later as the inflection point in a peak."
--Pacific Epoch
"While this success is rather exciting, it is most likely attributable to a small share offering--only about 4 million shares were sold here on the NASDAQ. "
--Adaptive Internet Solutions