Baidu was the most frequently used search engine in China in 2004, according to a survey by Shanghai iResearch Co., and was the second-largest Web site in China in terms of user traffic during the three months ended July 18, according to Alexa.com. Net income for the three months that ended in March was $303,000, more than double compared with the same period a year ago.
There are likely more good times ahead, since China's Internet market is growing at a fast clip: according to iResearch, the number of Internet search users in China is projected to grow at a compound annual growth rate of 27.5% from 2005 to 2007.
"This company has a growth opportunity that's going to be seen by investors as enormous," says Paul Bard, an analyst with Renaissance Capital LLC in Greenwich, Conn. "And I'm sure what people are going to say is, wow, this could be what Google was three years ago."
Even Google appears to think the company is a good investment: The U.S. search engine owns 2.6% of Baidu, according to Securities and Exchange Commission filings, and isn't listed among the entities that plan to sell their stakes in the IPO.
The IPO is to be underwritten by Goldman Sachs Group Inc.'s Goldman Sachs (Asia) LLC, Credit Suisse Group's Credit Suisse First Boston and Piper Jaffray Cos., and will trade in the form of American depositary shares on the Nasdaq Stock Market under the symbol BIDU.
Baidu is selling 3.7 million shares to the public, a 12% sliver of the 31.7 million shares that will be outstanding after the offering. The company's executives, directors, and venture-capital firms will continue to own substantial stakes in Baidu after it goes public.
(from The Wall St Journal)
Goldman Sachs is lead underwriter and it is expected to begin trading at $19-$20. Here is their website.
baidu.com
Update: August 1, 2021
In recent years Baidu has invested heavily in artificial intelligence (AI) and has become China’s leading AI company. This is described in CEO’s excellent 2020 book, which I highly recommend. For the current state of affairs see the seven minute video below.
Book: “Artificial Intelligence Revolution: How AI Will Change Our Society, Economy, And Culture” by Baidu CEO Robin Li
Video: “Baidu: How China Became The World Champion In AI” youtu.be
Baidu is invested heavily in AI in search engines (obviously), autonomous vehicles, Baidu Brain and has a $2 billion AI chip subsidiary.
Self-driving vehicles: Message 33420466 Message 33420467
Baidu Brain: Message 33420592
AI Chips: Message 33420330 Message 33420330
Risks: The major risks of investing in Baidu have to do with it being a Chinese company listed on the NYSE.
Risk 1: China regulation: From tech to education investors-corner.bnpparibas-am.com
Risk 2: Chinese tech stocks slump as U.S. SEC begins rollout of law aimed at delisting mobile.reuters.com
Risk 3: Invest in China, but Without Illusions nytimes.com
AI in general: For a comprehensive discussion of AI and AI companies in general, see the Artificial Intelligence, Robotics and Automation board moderated by my friend Glenn Petersen. Subject 59856
Further updates will be provided as deemed necessary. |
