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.
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.
Facebook Inc on Wednesday reported its profit doubled in the second quarter as digital advertising surged, but warned of cooler growth in the months ahead in an update that sent its shares sinking. Profit rose to US$10.4 billion on revenue of US$29 billion, a 56 percent increase from last year, mainly from an increase in ad revenue, Facebook said. The number of people using the social network monthly climbed to 2.9 billion, a year-on-year gain of 7 percent, while about 3.5 billion people used at least one of the company’s apps, including Instagram, WhatsApp and Messenger. “We had a strong quarter, as we
FURTHER TAX MEASURES NEEDED? Corporate owners accounted for almost 30 percent of empty houses, many of which are held by firms that own 10 or more properties The number of unoccupied houses nationwide totaled 876,000 units last year, or 11.94 percent of all houses, the Ministry of the Interior said in a report issued on Thursday. Almost 30 percent of empty houses were owned by companies, suggesting that many corporate property owners engage in house hoarding, the ministry said. Excluding developers and builders, companies still owned 20 percent of empty houses, it said. The report is based on housing units’ electricity use and considers properties that use less than 60 kilowatt-hours per month as unoccupied. The study contradicts Ministry of Finance reports saying that house hoarding subsided and there is no
HIGH-END MARKET: The company has sufficient growth upsides in its four major business segments to reach revenue of US$20 billion, CEO Rick Tsai told investors MediaTek Inc (聯發科), the world’s biggest supplier of 5G smartphone chips, yesterday raised its revenue growth target for this year to more than 45 percent, after strong demand mainly for its mid-range and premium 5G chips pushed net profit to a record high last quarter. The Hsinchu-based chip designer had three months earlier projected a 40 percent growth from NT$322.16 billion (US$11.48 billion) last year. MediaTek expects next year to be another growth year, with a higher 5G penetration rate and accelerating digital transformation during the post-COVID-19 pandemic era. The company also gained confidence about its gross margin improvement on the expectation
CAUSE INVESTIGATED: The incident occurred early in the morning, when electricity demand was low, and did not result in a power outage or a radiation leak, Taipower said The No. 2 reactor at the Guosheng Nuclear Power Plant in New Taipei City’s Wanli District (萬里) experienced a malfunction that triggered an automatic shutdown early yesterday morning, Taiwan Power Co (Taipower, 台電) said. The exact cause of the incident is still being investigated, but there is no risk of a radiation leak, the state-run utility said. “While we are still investigating the exact cause, the automatic shutdown was safely executed and there is no danger from radiation,” Taipower spokesman Chang Ting-shu (張廷舒) said. The malfunction occurred at 6:33am, triggering an emergency shutdown, taking 985 megawatts of power offline, Chang said. The control