Billions and Billions (of Idiots)
by Mr JugglesNASDAQ stocks, especially those with high betas, fell last Thursday because of a JPMorgan equity research note expressing caution about Baidu’s (NASDAQ: BIDU)3Q revenue estimates. Baidu, which had been trading up several percent at an all-time high of $359, quickly dropped 10%, later closing at $309. That would seem reasonable except:
- Baidu took the rest of the market with it. Companies like Google, Apple, Research in Motion, and Amazon.com all went from being positive on the day to deeply negative before rebounding slightly. Keep in mind that Baidu accounts for $~66mm of quarterly revenue (i.e., nothing) and yet it is moving hundreds of billions of market cap a continent away!
- The same JPMorgan analyst who reduced his Baidu estimates today had upgraded Baidu two weeks ago and initiated with a $400 price target. In a report titled Billions and Billions, he had recommended buying a stock with a 34x 2010E EPS multiple
It took down FCX while gold was up $11, too. Boy, that Chinese innerweb sure is powerful!
“The two most abundant elements in the universe are Hydrogen and Stupidity.”
-Harlan Ellison
Perhaps there should be some clarification of the whole $359, 10%, $309 thing.
Slightly Chewbacca.
bidu going to 400. SCREW YOU SHORTS!
Just Nationalize It.