Mark Krieger

Shorting Baidu Easier than Shooting Fish in a Barrel

Shane: I kind of see your point, but don't you think you could be drinking the kool aid on this one? Most of the growth and then some has already been factored in the current share price. At this point the hype on this stock reminds me of "irrational exhuberance" and tulip crash. The risk on this sucker is sky high at these elevated readings.The law of bigger numbers always comes to play in growth stories and your assumptions do not seem to take into consideration competitors gaining market share.


On Jul 21 08:51 AM Shane Farley wrote:

> china just passed 340 million web users and like 75% of these use
> Baidu almost daily. Their daily traffic is around 250 million users.
> Within a year the markets will be talking big about china being on
> the verge of having 450-500 million web users. Simply put, Baidu
> could actually be severely undervalued. Anyone who was doing heavy
> search marketing back in the early days of Google PPC know all too
> well how bids for search terms went through a hyper growth phase
> of like $.05 a click to $.44. Baidu is in this same early phase where
> bid prices, because of massive competition for traffic, is skyrocketing
> in China. This will add to the top line, bottom line, and to margin
> expansion in huge ways. Chinese users use the web more than USA users.
> Soon they will have twice as many users as the USA. Shorting baidu
> may be more like shooting yourself in the foot as bid prices for
> clicks in China jump from $.08-.$.10 to $.25 and Baidu earnings skyrocket.