Baidu Has A Bubble-rific Debut

from the bad-bankers dept

Well, apparently investors didn't care that Baidu is about to lose its main differentiating feature (the ability to download free music and movies). In the pursuit of new dot com bubble mania, investors drove the stock up 354% in its debut (though, actually, it's not clear that number is accurate -- my calculation of the price jumping from $27 to $151 suggests about a 460% increase). We haven't seen that sort of first day bump since the bubble years, so it might be worth breaking out the old IPO lesson for those who have forgotten it. While this sort of news excites people and makes them think that this was a successful IPO, it's actually the opposite. It means the investment bankers did a horrible job of pricing the shares -- leaving a ton of money on the table that should have gone to Baidu, but instead went to people (friends of the investment bankers, of course) who immediately flipped their shares.

Reader Comments

Subscribe: RSS

View by: Time | Thread



Add Your Comment

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Close

Add A Reply

Have a Techdirt Account? Sign in now. Want one? Register here



Subscribe to the Techdirt Daily newsletter




Comment Options:

  • Use markdown. Use plain text.
  • Remember name/email/url (set a cookie)

Follow Techdirt
Techdirt Gear
Show Now: Takedown
Advertisement
Report this ad  |  Hide Techdirt ads
Essential Reading
Techdirt Deals
Report this ad  |  Hide Techdirt ads
Techdirt Insider Chat
Advertisement
Report this ad  |  Hide Techdirt ads
Recent Stories
Advertisement
Report this ad  |  Hide Techdirt ads

Close

Email This

This feature is only available to registered users. Register or sign in to use it.