I'm in agreement with your sentiment. I want to give some interesting perspective. If BIDU is worth $60B while it's market share in China search has DROPPED from 85% now to only 60%, then what should the marked cap of the #2 search in company in China be worth especially if QIHU is INCREASING in China's search where now they are already over 20% as an article on either Wed. or Thursday stated? One third (60% of BIDU search compared to 20% QIHU search in China) of BIDU's market cap would be $20B. Right now QIHU has only an $11B market cap. So maybe this stock S/B around $175? It makes sense to me.
yes I made this very point months back when shares where $70ish.. I vauled QIHU at $390 if you do the comparison because of the shares outstanding. Today QIHU would have to trade at $185 to equal 20% of the market value of BIDU. This of course assumes that BIDU is the proxy for the Chinese internet search space so for this example let's assume it is and that BIDU is properly valued. Next you have to normalize the difference in the shareoutstanding of the two companies: BIDU is nearly 5.45X greater in value and 3 times larger in their shares outstanding. The market value $ difference is $10.8 billion between BIDU and QIHU. Take 20% of $58 billion and you get $11.6 billion/110million sharesout = $97 which is QIHU's stock price value based on 20% marketshare. But if you model in 30%, which is where QIHU is aiming at this year then you get $146/share. The issue is always "what is the proper value of Chinese internet marketshare, is BIDU a fair proxy and who holds what marketshare???
ALL valid points. This is the very reason why this stock has climbed so hard year to date. I am sure when Qihu reports they will give us more solid data to go on. I think $175 happens in 2014, but we must wait for the numbers to come out. Rest assured the cream will rise to the top, (as it has to date). We are so fortunate. I say a buy even at 97, by Q1 you will be pleased.