Baidu Shares Punished For Lowering Outlook
October 26, 2009 by Tisa Silver
Filed under Finance
China’s leading search engine, Baidu (BIDU) posted a 41 percent increase in earnings and a 39 percent increase in revenues for the recently completed third quarter. Shares of Baidu lost 13 percent of their value in after-hours trading.
Photo by danny sullivan, courtesy of flickr
What went wrong?
According to Reuters, the company’s outlook took a turn for the worse, execs are predicting Q4 revenues will come in well below the Street’s expectations.
The company blamed the decrease in revenue on its transition to new advertising technology.
Up until today, 2009 had been a banner year for shares of Baidu. The stock had more than doubled in six months. BIDU broke the $400 per share mark last month for the first time 2007, and hit a high earlier today at $439.90.
Unfortunately for shareholders, BIDU broke through the $400 mark again tonight, and this time it was from the upside.
Baidu has been nicknamed “The Chinese Google Killer.” I’m not so sure tonight’s punishment fits the crime. A lowered outlook is never a good sign, but sometimes the signs are misread. We’ll see if that was the case with BIDU in the days to come.
