Baidu.com, China's Google, Raises $109 Mln in IPO

From Red Herring: Baidu Raises $109M in IPO

China’s answer to Google starts trading Friday after a higher-than-expected IPO.

"With investors salivating over China’s answer to Google, Chinese search engine Baidu.com raised $109 million in its initial public offering and faced heavy demand in its Nasdaq debut on Friday.

The company priced its American depositary shares (ADS) at $27, about 540 times the company's earnings of $0.05 per share.

The valuation was stunning. Just earlier in the day, Baidu announced in an Securities and Exchange Commission filing it intended to offer its shares in a range of $23 to $25; it previously indicated it would seek $19 to $21.
In other words, demand for the shares is so strong that their price rose by about a third before the offering even reached the market.

The company also increased the number of shares offered to 4.04 million from 3.7 million. The offering values the company at $872 million, only about one-hundredth the worth of Google, but with an opportunity to claim a giant portion of China's just-emerging web marketplace.

Demand for the ADS is so strong that the issue is expected to jump another 30 percent or more as investors bid for one of the year's hottest IPOs.
“Investors may put blinders on and not think about risks and just think about upside,” said Tom Forte, an analyst with Morningstar."

Facts and numbers: Baidu (BIDU) IPO - Fact Sheet

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