Baidu NASDAQ overdraft investment enthusiasm suffered from the roller coaster

After a lapse of 4 years, the concept of financing phenomenon appears again. Enterprises should be prepared to do in order to be invincible in the market trend

Professor of economics at Guangdong Polytechnic Normal University / Zhang Rui (for IT Time)

Recently, Baidu was the first time the U.S. investment bank Thomas Weisel rating as a general market performance".

October 27th, Baidu (Nasdaq:BIDU) announced yesterday, Baidu announced third quarter financial report, compared with the previous quarter, total revenue growth of 88 million 900 thousand yuan, an increase of 27.6%, profit 8 million 500 thousand yuan, down 29.4%. Decline in profits, because this quarter Baidu employee incentives increased to 10 million 800 thousand yuan." Baidu said to IT Time.

Diluted share capital, Baidu earnings per share of 3 cents. Wall Street analysts expect Baidu to make a net profit of 4 cents a share, not including an option of $6. Although Baidu chose to release earnings after the NASDAQ closed, but due to earnings per share did not meet Wall Street expectations, the stock is still down 15% in after hours trading.

On the same day, Baidu's largest shareholder, venture capital firms and Scott Vlcek also cash exit......

In people guessing whether Baidu might renew network bubble tragedy, the Chinese Internet portal giant was facing the city is satisfied vanity issued a "heaven is hell". Maybe has been multiplied by the symbols of wealth and rapid contraction of the daxitaibei, known as the "Chinese Google" Baidu can get a deep thinking from the opportunity......

Two days of ice and fire

Processed countless millions of American billionaire miracle stocks also make new Baidu experience to "create wealth" and. On the day of the listing of Baidu, there were 7 billionaires, hundreds of millionaires and a large number of millionaires, and most of them were still students for about 6 years ago.

Baidu's frenzied pursuit of investors to create a thriving Baidu shares. As the "China Google", the concept of strong charm attracted the attention of investors, especially those who have missed investment opportunities in the Google market investors do not want to miss the second Google". Thus, although Baidu has just achieved profitability in 2004, earnings per share only a few cents, but U.S. investors optimistic about the vast market of China's 1 billion 300 million population, optimistic about the huge growth of Chinese search engines. From 2006 to 2009, Baidu's annual revenue growth rate will reach 35%, the average annual earnings per share growth rate will reach $40%. The reason for this judgment is that by 2008 the number of Chinese Internet users will reach 252 million, more than the United States, which will provide a strong guarantee for the growth of Baidu." A senior analyst for the IT Time said.

However, God's return to God, Caesar's Caesar, climbed to the top of the mountain, people may see the downhill......

When Baidu's stock price of more than $150, the price earnings ratio of more than 2000 times, some people had issued a Baidu crazy, the fierce cry. The capital market investors when the stock price is much higher than the bent solely on profit, its intrinsic value is the performance of the company, the risk of price adjustment is more and more big. U.S. stock market is also a short market, according to media reports, when Baidu's stock price exceeded $100, some U.S. investors are preparing to sell short Baidu. On the other hand, Wall Street's major securities brokers offer stock lending services to investors as long as investors pay a certain fee. The high price earnings ratio and bizarre stock price, investors will inevitably lead to short selling.

In fact, on the first day of the listing of Baidu's $120 hit a high share price closed, Baidu is facing a high cold fate. At that time, Wall Street and China's Internet industry analysts believe that there is a big bubble in Baidu shares, the stock price is inevitable fate. Sure enough, the stock market soon began to fall all the way Baidu. As of September 16th, Baidu shares fell 47.18%. At present, the entire Chinese search market output value of only $more than 100 million, Baidu's share price return is a necessity. At the same time, due to the prospect of the development of the Internet Chinese investors expected there is a big difference, Baidu's share price will show the volatility of the situation in quite a long period of time, but the stock price trend is down." Experts on the IT Time said.

Into investment bank? The investment bank lost?

"NASDAQ plans in the operation of Baidu, as Baidu listed underwriters Goldman Sachs, Credit Suisse First Boston is also well intentioned. Therefore, when Baidu IPO, the number of its issued only 4 million 40 thousand shares, accounting for the proportion of its total share capital of only $12%. So small issue size will undoubtedly have a scarcity, allow investors to form a tight feeling, which recognize the high price of Baidu, which is Baidu listed on the same day to reason from the issue price of $27 soared to more than $120 closing." Analysts on the IT Time said.

Coincidentally, when Baidu storm appeared under the helicopter after deduction of turn, has a "network queen" said Morgan Stanley star analyst Mary Meeker released a report on the Chinese internet report, Chinese said the potential is enormous, but for this saying, Baidu shares in 3 days and jumped 30%.

But just two days later, the dramatic report served as Baidu listed underwriters Goldman published but Baidu shares relentlessly into bingku. In September 14th, Goldman Sachs analyst Anthony Noto -- the 2004 "institutional investors" magazine of the world's best Internet stock analysts believe that Baidu's stock is overvalued by at least 60%, the target price should be 27