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CFO's death hurts Baidu's shares

"Under Shawn [Wang], we have built up a mature and transparent finance system."

Sun Yao, Baidu spokeswoman

Baidu.com Inc (百度), owner of China's most popular Internet search site, says the company's shares may fall in the short term following the death of chief financial officer Shawn Wang (王湛生) because of uncertainty about his replacement.

"Under Shawn, we have built up a mature and transparent finance system," Baidu spokeswoman Sun Yao (孫瑤) said in Beijing in a telephone interview. "The market will show a negative reaction over the short term, but not in the long term."

Wang died on Dec. 27 "in an accident in China during the Christmas holiday vacation," Baidu said in a press release.

The Wang family asked that details about the circumstances of his death not be released to the media, the Beijing-based company said.

Baidu shares have fallen 4.7 percent in the two trading days since the death was announced, after rising for seven straight days.

"The news added to uncertainty for the company in the near term as they seek a replacement," said Dick Wei (韋迪), an analyst at JPMorgan Securities Inc, by telephone from Hong Kong. "For the longer term, we believe the business impact is not significant because it's a leading technology company."

Wei kept his "overweight" rating on the stock, with a 12-month target price of US$400.

Baidu declined US$9.07, or 2.3 percent, to US$389.80 in New York trading on Dec. 31.

The stock more than tripled last year, and was the biggest gainer on the NASDAQ 100 Index. Baidu is the only Chinese company on the index, which consists of the 100 biggest non-financial companies by market value.

The company has expanded its market share in China to 61 percent of Web queries, compared with 24 percent for nearest rival Google Inc, according to Analysys International, a Beijing-based researcher.

Sun did not say when the company was expecting to find a replacement for Wang.

"The senior management and our finance team will share Shawn's work until we find a successor to take over his job," she said.

JPMorgan's Wei said he expected that Shen Haoyu (沈浩宇), Baidu's vice president of business operations, would oversee the company's financial operations until a replacement was found.
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