| Baidu.com, the Wall Street BlockBuster |
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New York(24x7Updates) -- Google’s poor cousin from China has made a spectacular market entry in US with its shares closing at 4 times its intial price of $27.
American investors opened their wallets for Beijing-based Internet search engine Baidu.com Inc. and drove the stock up from its initial sale price of $27 to $122.54 at the close of trading, for a 354% gain. This has been the biggest one day stock surge since the year 2000.
Baidu, which takes its name from an ancient Chinese poem about a man in search of love, had its ADS priced at $27 late Thursday, having a day earlier raised its indicative price range to $23 to $25 a share from $19 to $21 amid strong investor demand. It also raised its offering size to 4.04 million ADS from 3.7 million.
Comparisons between Baidu.com and Google -- which owns 2.6 percent of the Chinese company -- generated strong interest in the offering, which raised about $109 million and valued the five-year-old company at $872 million.
Expectations for the small listing of about 12.5 percent of the company were high since Google’s share price has more than tripled since it went public a year ago.
Baidu.com’s market capitalization quickly soared to about $4 billion as its stock rocketed -- but still only a fraction of Google’s market value of about $82 billion.
Baidu chairman, Robin Li, 36, ended the day with a personal stake worth $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. "We are going to try not to pay attention to the stock (price)," Li said. "As long as we do our job, the stock should take care of itself."
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