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Optical/IP

Bye-Bye Baidu

6:00 PM -- Remember Baidu.com (Nasdaq: BIDU)? That was the Chinese Internet portal that went public a couple of weeks ago. So many crazed, salivating, give-me-a-piece-of-anything-Chinese-and-Internet investors wanted in on the IPO that it wasn't possible to get it at the offering price of $27 on the first day of trading... as it immediately started trading at more than $70.

The droolers weren't done. Baidu quickly rocketed to nearly six times it's offering price in a matter of days -- hitting a high of $153.98.

Well, the old fortune cookie says, "May you sell your Internet stocks when they hit triple digits." Today, Baidu.com closed at $72.30, near the first price that printed on its first day of trading.

How weird. How 2000.

— R. Scott Raynovich, US Editor, Light Reading

alcaseltzer 12/5/2012 | 3:04:51 AM
re: Bye-Bye Baidu Naw...Google and Baidu are different animals. BIDU investors are likely just waking up to the complicated structure they've just bought into (see below from the WSJ) and the fact that there's no real transparency into a Chinese company. Same problem UTSI has...

'Third, Chinese law restricts ownership of media assets by foreigners. Investors are actually buying shares in a Cayman Islands holding company, which owns a Virgin Islands incorporated company, which has contractual agreements with a Chinese company controlled by the two founders. And that's not all. The holding company has a dual-share structure giving B shares 10 times the votes as A shares, so that insiders owning B shares will control the company's destiny no matter how many A shares are sold to the public.

On top of this, insiders are selling down part of their holding in the IPO. Before putting their own money into "China's Google," investors might ask themselves why its founders think now is a good time to reduce their exposure.'
DCITDave 12/5/2012 | 3:04:51 AM
re: Bye-Bye Baidu ... or is it?

ph
brahmos 12/5/2012 | 3:04:49 AM
re: Bye-Bye Baidu before every crash or correction people keep on saying
- *this time* it is different
- *this company* is different

2000, cisco, ciena, jnpr, scmr, jdsu, qualcomm....

google or anybody else cant justify insane valuations indefinitely. onlee ones to really profit will be insiders who got options cheap.
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