In one of the most talked about IPOs of 2005, China's leading Internet search engine Baidu priced 4.04 million ADSs at $27 per ADS, above an upwardly revised range of $23-$25. The company had originally filed to sell 3.7 million ADSs at a range of $19-$21 before upping the size and price of its offering earlier Thursday morning in response to strong institutional demand. Goldman Sachs, CS First Boston and Piper Jaffray served as underwriters on the deal. The stock will open for trading on Friday on the Nasdaq under the symbol "BIDU".
At its $27 offer price, Baidu holds a total market capitalization of $898 million, about 42x its trailing net revenue of $21.6 million. In comparison, U.S. search engine leaders Google (GOOG) and Yahoo! (YHOO) are currently valued at multiples to trailing revenue of 19x and 11x, respectively. In its most recent quarter ended June 30, 2005, Baidu reported an estimated 185% increase in net revenue, more than double Google's second quarter growth rate of 98% and more than triple the growth rate reported by Yahoo! of 51%.
