Baidu Soars On IPO Opening
The first day of trading for the Chinese search engine company on NASDAQ leaped from $27 to a close of $122.54.
The so-called Google of China rocketed to lofty heights on its first day of trading. A late change in terms and pricing of Baidu.com’s IPO still saw the company’s stock price open at $66, according to InternetNews.com.
In shades of 1999, Baidu’s stock touched a high of $151.21 before dropping back to its close price. The company now has a market valuation of around $4 billion USD, much greater than its sales of cash flow. A Reuters report observes that the company was the biggest first day IPO in five years.
Google owns 2.6 percent of Baidu, and sources earlier this year claimed Google wanted to buy the rest of the company but was rebuffed. The big winner on the day had to be venture capital firm Draper Fisher Jurvetson, owners of a 28.1 percent piece of Baidu.
Baidu, like Google and other search engines, makes its money with advertising. As the leading Chinese-language search engine in a country with over 100 million Internet users and growing, many investors seem to think Baidu could be the next Google. Other firms like MSN have entered the market, and the competition for ad dollars and eyeballs will be fierce.
David Utter is a staff writer for WebProNews covering technology and business. Email him here.