Market Overview

BIDU: Stock To Sell Today


Baidu Inc (NASDAQ: BIDU) is an Internet search engine in the Chinese language. The company operates in China primarily through Baidu Online Network Technology (Beijing) Co Ltd (Baidu Online) and Baidu Netcom Science Technology Co Ltd (Baidu Netcom). In January 2008, BIDU expanded its presence to Japan. With China boasting of about 300 million internet users, which continues to grow rapidly, BIDU has established itself as the Internet in China.

Google (NASDAQ: GOOG), Microsoft Corporation (NASDAQ: MSFT) and Yahoo (NASDAQ: YHOO) have forayed into the Chinese market after changes in foreign regulations. Despite this, BIDU has continued to gain market share, up at about 77% in Q3 from 75.6% in Q2, according to the company’s chief financial officer, Jennifer Li. Moreover, the current number of internet users in China is still a far cry from the nation’s population of 1.4 billion.

However, BIDU may not be able to continue to gain market share. Tech analysts in China are praising GOOG for doing a good job on understanding the nuances of the Chinese language and users are finding that the world’s leading search engine delivers a better search experience. Moreover, unlike BIDU, GOOG intends to go well beyond traditional online advertising and search in China.

Moreover, Baidu’s five-year EPS growth is projected to fall to 37.69%, from 97.06% in the previous five years. Statistics also show that BIDU’s stock has had a dream run this year, with the stock gaining 218.78% so far this year. Moreover, Dan Caplinger of Motley Fool suggests selling BIDU shares for investors who fall under the tax bracket of 15% or lower and have held the stock for a year. These investors qualify for a tax savings of $4,585 on every 100 BIDU shares if they sell the stock TODAY.

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