Track this call on Baidu (
) - hold or fold-em, good bad and ugly.
[caption id="attachment_61700" align="alignright" width="300"
caption="Baidu campus, China"]
The ambassador is on a roll. I wrote a backgrounder about
Chinese internet stocks getting sold for the wrong reasons
back on December fifth due to SEC concerns etc.
Fast forward to today and BIDU is now 18x the stock average, and
70x earnings for the previous five years.
- The SEC attack on Chinese affiliates (and Chinese internet
companies) by the Big Four accounting firms for withholding
documents on Chinese internet stocks
- A rumor that a divorced wife would get a huge chunk of
- 30% growth not 40% growth and deceleration for Chinese
- Fear of a 1.5 billion bond deal to raise for
This was an opportunity in Baidu which was 14x earnings then, or
Value multiple for a growth stock like Baidu Inc. (
) can be scary but this was overdone to the downside and we
still want to be in the trade. So we rolled our 105 calls into 115
weekly next week but in the process took some 1/3 of premium out of
for the Ambassador's next move.