Spectacular IPO Chinese search engine

The shares of the Chinese search engine Baidu are up more than 350 percent on the first day of the IPO on Nasdaq. The initial price was set at $27, but the price opened at $66 and shot up over the course of the day to close at $122.54. Such a price increase has not happened since the burst of the dot-com bubble a few years ago.

The increase can be explained, among other things, by the search engine’s similarity to Google, which has a share in it and which it is thought could completely take over Baidu. In addition, investors are betting on a significant growth in internet use in China: the number of Chinese internet users is expected to double in the next two years. Currently, there are already 100 million regularly internet-using Chinese, of which 80 percent would use Baidu. With a look to the past, some analysts wonder whether the share price has not risen too quickly, also given that it is a relatively small company. Others believe that Baidu will play a major role in a booming internet market.

In recent years, foreign investors have been diligently seeking the Chinese equivalents of giants like Yahoo, Google and eBay. The candidates are formed by companies of young Chinese entrepreneurs, many of whom have been trained in the United States. Baidu, a 4-year-old company, was a relatively small player last year with revenues of $13 million and profits of $1.4 million. After the spectacular first trading day, the value of the company is estimated at almost four billion dollars. The current price is slightly above the level of Friday’s closing price, a peak of $ 155 was reached shortly after the stock market opened this morning.