Posts Tagged 'Baidu'

Google’s Pain, Baidu’s Gain?

On Wednesday, Google (GOOG) announced it may pull out of China because it had been hit with a ton of attacks that they believe could be coming from the Chinese government.  We know that sensorship is a big deal in China.  Therefore, the Chinese government wants to control what is searched for and said.  This completely goes against Google’s model.  So, it would make sense the two wouldn’t get along.

With that said, so far it is just a threat by Google.  Today, Google dropped about $7 per share while Baidu (BIDU), Google’s Chinese competitor, jumped $52.  These stocks are moving as if this is a done deal.  Google is run by some very smart people and they know leaving China may not make sense.  But, they are big enough and powerful enough to initiate a threat.  Analysts are saying there’s about a 50/50 chance they actually follow through on their threat.  In the short-term, this could cause Google (GOOG) to fall to about $540-$550/share.  If it does, I would add some exposure at that point.  This is a tremendous company that rarely is on sale.  This stock was $630/share just a few days ago.  Getting it $80-$90 off of that high would be a gift.

On the flip side, Baidu (BIDU) tacked on $52 today on this news and is now at its high.  A high it has reached four times since October.  So, before you rush in and by Baidu, I’d first wait to see if this is something that really is going to happen and then secondly determine which company’s a better deal.  My money’s on Google.  But, not just yet.



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January 2019
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