Long Microsoft(MSFT) – Short Baidu(BIDU)

By: ispeculatornew
Date posted: 10.26.2009 (5:00 am) | Write a Comment  (6 Comments)

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While I am long Baidu in my 4 picks for 2009 and still ok being so (cannot change those picks anyway), the valuation for Baidu is becomming very extreme with the stock up over 300% so far this year. It now trades at 435$, at 86 times earnings!! Because of that, I feel like it is a good time to go short on Baidu going against Microsoft. The company started by Bill Gates is gaining momentum with Bing and even seems to have Google on a defensive position, something we have not seen in a long time.

For those who had not read, we had a series of article about Microsoft:

Part #1
Part #2
Part #3
Part #4
Part #5
Part #6

Bing is still slowly but surely gaining market share:

Last week’s announcement of a deal between Bing and Twitter generated some panic at Google headquarters and the piles of cash that Microsoft is throwing at search is starting to show results.  Baidu off course is another reason why Google executives are getting frustrated as they continue to show very strong results in China.

msft

bidu

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6 Comments

  1. Comment by IS — October 26, 2009 @ 3:48 pm

    Opening prices on this trade are:

    MSFT: 28.12
    BIDU 438.90

  2. Comment by MoneyCometh — October 26, 2009 @ 6:59 pm

    I’ve never heard of Baidu. I’ll be researching up on them a little. Thanks for the information.

  3. Comment by singh — October 27, 2009 @ 8:38 am

    nice call i missed though

  4. Pingback by Intelligent Speculator | Quick trade news — October 27, 2009 @ 3:52 pm

    […] Microsoft (MSFT) -Baidu (BDIU) trade that was initiated yesterday has already proved profitable as the earnings from Baidu came in much […]

  5. Comment by IS — October 29, 2009 @ 6:58 am

    Trade was closed at yesterday’s opening:

    MSFT: 28.24
    BIDU: 383.67

    Performance: +18.59%

  6. […] 06, 2009 By: IS Category: Free Stock Picks It was only a few weeks ago that I did a successful trade on Baidu, being short the Chinese search engine. As I had said, I believed the stock had moved up […]

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