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Baidu, Inc. Message Board

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  • xgrk88a xgrk88a Nov 13, 2012 1:51 PM Flag

    Why short BIDU?

    Agreed that technically it could bounce here, but techincals are short term and I am a long term buyer, so I don't watch short term movements too much.

    If the concern is regarding the transition from dekstop to mobile, wouldn't google shares be falling due to the same concerns? Baidu reported a triple digit percent growth in mobile which is much better than google's mobile growth? Baidu has also publicly said that it will grow thorough acquisitions if necessary, so assuming that their mobile initiative isn't very successful, they could acquire their way into the business?

    Also, I am a big believer that all ships rise in a rising tide. If China's economy continues to grow, most players will experience growth unless they have an inferior product. Even though many people are moving to mobile, there will continue to be desktop growth as can be seen in Lenovo's growth numbers.

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    • GOOG also has suffered from the transition to mobile, as its stock price (until recently) and its low PE ratio will ascertain, but it has 2 huge advantages: its share of US mobile searches if far higher than BIDU's in China, so far less vulnerable, and it has oodles of money in the bank to compete, unlike BIDU which probably will have to go into debt to fight off Tencent et al. all the while suffering from margin compression and accrued target acquisition costs...Not a pretty picture, and not one easily remedied. I know you are investing long-term, but remember that in the long-term we are all dead...Maybe your heirs will see some upside on your BIDU investment? Or Marissa Mayer can replace Robin Li eventually...She seems to have managed to pump some life into YHOO's old stinky corpse, she might be able to do the same to BIDU's...LOL!

      • 1 Reply to smartass_2001
      • 1. When I say long term, I mean 5+ years. I hope I won't be dead in 5 years.

        2. I don't think cash is an issue for BIDU. Yes, GOOG has more cash than BIDU, but $1 in China buys about 10x the stuff that $1 does in the USA. GOOG has 13x the cash and 15x the revenue of BIDU. If BIDU was competing with GOOG, hands down I would bet on GOOG. But other than Tencent, and Alibaba, neither of which directly compete with BIDU, BIDU's competitors don't have as much cash or profit as BIDU.

        3. I also expect the Yuan to appreciate against the US$ over time. This adds one more bullish backdrop to this stock long term.

        4. As for debt, I would love it if BIDU goes into debt. Debt is cheap right now. If used wisely, everybody should borrow every penny they can.

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