Baidu.com Inc (
The Beijing-based company's shares closed at US$122.54 on the NASDAQ Stock Market, a 354 percent gain from its initial public offering (IPO) price of US$27. That represented the biggest one-day gain since the final days of the dot-com when IPOs regularly soared.
No IPO has climbed as high on the first day of trading as Baidu's did on Friday since the shares of software maker Selectica Inc soared 371 percent during their March 2000 debut, according to IPOhome.com. Selectica's shares closed unchanged on Friday at US$3.15 on the NASDAQ.
PHOTO: AP
The rapid run-up gave Baidu a market value of US$4 billion -- a lofty appraisal of a five-and-a-half-year-old company that only recently became profitable. Baidu earned US$1.8 million on revenue of US$13.6 million during the first half of this year.
The company's management expects much bigger things as more of China's vast population surf the Internet. More than 100 million of China's residents currently surf the Web. Baidu has been able to pluck enough visitors from that audience to emerge as the world's sixth-most trafficked Web site.
"I am very confident in the future of Internet search in China," Baidu chairman Robin Li (
Googlemania played a major role in Friday's buying frenzy.
As the early search-engine leader in China's nascent Internet market, Baidu is inspiring comparisons to Google Inc.
Like Google, Baidu -- traded under the ticker symbol BIDU -- so far has made most of its money from text-based ads that are tied to search requests and generate a commission whenever the commercial links are clicked on.
Drawn by Baidu's potential, Google even paid US$5 million last year for 749,625 of the company's shares -- a stake worth US$92 million on Friday.
Google's early ownership interest has convinced some investors that it will eventually buy Baidu for a lucrative price, although there has been nothing concrete to support that belief.
Memories of Google's IPO may have provided Baidu with its biggest lift. Nearly a year ago, Google went public at US$85 per share -- a price that many investors viewed as inflated but now looks like a bargain with the company's shares closing at US$292.35 on Friday.
"This is a `son-of-Google' investor mentality," said David Menlow, president of IPO Financial, an industry newsletter. "Everyone remembers they could have had Google at US$85 and don't want to let it happen again."
Although Baidu's profits have been puny so far, Menlow and another IPO expert, Linda Killian, said the rapid run-up in the company's stock isn't quite the same as the late 1990s mania that produced mind-boggling valuations for unproven dot-coms that imploded into dot-bombs.
As the Internet becomes more ingrained in the everyday lives of the Chinese, it's possible to envision Baidu duplicating the tremendous growth that Google has enjoyed, Killian said. Google's market value now hovers around US$85 billion -- something that would have seemed unfathomable when Stanford University graduate students Larry Page and Sergey Brin launched the company seven years ago.
"There are a handful of companies where you need to dream," said Killian, a portfolio manager for an investment fund specializing in IPOs.
"You have to think, `If everything were to go right for this company, what could they achieve?' There are companies that could become the next Microsoft or Google," she said.
Li, who worked in Silicon Valley for a couple of years and received his master's degree in computer science from University of New York at Buffalo, formed the company with Eric Xu (徐勇). Although Xu no longer works at Baidu, he was alongside Li on Friday to watch the company's stock soar in its Wall Street debut.
Li, 36, ended the day with a personal stake worth US$920 million, but he said he won't let the sudden wealth affect him. He can't sell any of his stock for two years under restrictions imposed as part of the IPO.
"My passion is search and changing the lives of ordinary people with search," he said.
Baidu has awarded stock options to its 700 employees in China, giving them a slice of the wealth created by the IPO. Most of the workers can start holdings in six months.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, booked its first-ever profit from its Arizona subsidiary in the first half of this year, four years after operations began, a company financial statement showed. Wholly owned by TSMC, the Arizona unit contributed NT$4.52 billion (US$150.1 million) in net profit, compared with a loss of NT$4.34 billion a year earlier, the statement showed. The company attributed the turnaround to strong market demand and high factory utilization. The Arizona unit counts Apple Inc, Nvidia Corp and Advanced Micro Devices Inc among its major customers. The firm’s first fab in Arizona began high-volume production
VOTE OF CONFIDENCE: The Japanese company is adding Intel to an investment portfolio that includes artificial intelligence linchpins Nvidia Corp and TSMC Softbank Group Corp agreed to buy US$2 billion of Intel Corp stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. The Japanese company, which is adding Intel to an investment portfolio that includes artificial intelligence (AI) linchpins Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is to pay US$23 a share — a small discount to Intel’s last close. Shares of the US chipmaker, which would issue new stock to Softbank, surged more than 5 percent in after-hours trading. Softbank’s stock fell as much as 5.4 percent on Tuesday in Tokyo, its
COLLABORATION: Softbank would supply manufacturing gear to the factory, and a joint venture would make AI data center equipment, Young Liu said Hon Hai Precision Industry Co (鴻海精密) would operate a US factory owned by Softbank Group Corp, setting up what is in the running to be the first manufacturing site in the Japanese company’s US$500 billion Stargate venture with OpenAI and Oracle Corp. Softbank is acquiring Hon Hai’s electric-vehicle plant in Ohio, but the Taiwanese company would continue to run the complex after turning it into an artificial intelligence (AI) server production plant, Hon Hai chairman Young Liu (劉揚偉) said yesterday. Softbank would supply manufacturing gear to the factory, and a joint venture between the two companies would make AI data
The Taiwan Automation Intelligence and Robot Show, which is to be held from Wednesday to Saturday at the Taipei Nangang Exhibition Center, would showcase the latest in artificial intelligence (AI)-driven robotics and automation technologies, the organizer said yesterday. The event would highlight applications in smart manufacturing, as well as information and communications technology, the Taiwan Automation Intelligence and Robotics Association said. More than 1,000 companies are to display innovations in semiconductors, electromechanics, industrial automation and intelligent manufacturing, it said in a news release. Visitors can explore automated guided vehicles, 3D machine vision systems and AI-powered applications at the show, along
RSS