Just as companies have recently tended to trade lower when Google (NASDAQ:GOOG) announces that it is moving in on their turf, it should come as no surprise that Chinese internet portals (led by BIDU) have rallied in the last two days following Google's announcement that it may end up exiting the Chinese market over security and censorship concerns. As shown to the right, the ADRs of all four major Chinese search engine/internet portals have seen gains following Google's announcement Tuesday night.
The most puzzling aspect of the recent situation surrounding GOOG is how its stock has performed. As expected, the stock opened down nearly 3% on Wednesday. Since then, however, the stock has not only retraced those losses, but it is actually slightly higher compared to Tuesday's closing price of $590.48. How can GOOG's announcement be good for everybody?
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