Shares in Baidu.com - "China's Google" - shot up more than 250 per cent in New York yesterday, in one of the most spectacular stock market debuts since the height of the dotcom mania of the late 1990s.
At the initial public offering price, Baidu's American depository receipts were offered at 540 times historical earnings. Google, which owns a 2.6 per cent stake in Baidu, trades at about 74 times earnings. But by midsession in New York yesterday, the stock was up 255.3 per cent at $95.94 (€77.46), slightly below intra-day highs.
The Chinese company made about $5.2m in revenues in the first quarter of this year and $13.4m during all of last year, according to regulatory filings. Its shares had been priced at $27 each late on Thursday, above an already revised range of $23 to $25 a share, giving a market valuation before trading of about $872m.
The pricing yielded almost $110m in proceeds for the five-year-old company, which is China's first pure-play search engine to go public in the US. Baidu - the name comes from an ancient poem about a man seeking love - also increased the number of shares on offer to 4.04m, or 12.5 per cent of its capital, from 3.7m.
China is the world's second- biggest internet market after the US and more than 100m Chinese now have web access. - (Financial Times)
