Shares in Baidu (NASDAQ:BIDU), China’s biggest search engine (often called “China’s Google“) took a dramatic tumble on the US stock exchange after Credit Suisse downgraded the company’s rating from ‘neutral’ to ‘underperform’. Analyst Wallace Cheung set a new price target of $83, down from $118.
Cheung cites increased competition in the Chinese search market (including upstart Qihoo 360), weaker than expected ad market, and poor capitalization on mobile search (from which the company generates only 3% of total revenue despite 30% of search traffic coming from mobile devices). Other ratings agencies, including Jeffries and Raymond James, have also cut ratings on the search giant this month.
Baidu’s shares closed for the day at $106.49, a drop of 6.83 percent.
[Via: Tech in Asia]