Ring Register and Run From Baidu.com

This column was originally published on RealMoney on Aug. 5 at 1:59 p.m. EDT. It's being republished as a bonus for TheStreet.com readers.

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Who's to blame for Baidu.com(BIDU Quote)? I put it that way, rather than praising it and being happy about it, because, of course, it is absurd what happened, that a stock could be up $70 from its pricing. It is positively 1999. Too small a float. Handed to the wrong people. Given out at a valuation that, while high vs. Google(GOOG Quote) and Yahoo!(YHOO Quote) is low vs. where it could have gone out.

This is the kind of stuff that's so bad for the business. It's a monster.

Let's pull it apart, because it is so 1999. First, we have the very few shares offered, far fewer than the demand called for: just 4 million shares.

Second, we have all of the Google comparisons -- right down to the two hip founders -- even though is it much more expensive than Google and priced at 590 times earnings. Now it trades around 2,000 times earnings! (It is profitable, but barely -- making about $1.5 million so far.) What's attractive about Google is that it was actually cheap on the out years. Still is, although not as much as it was a year ago, when it was in the $80s.

Who knows about this thing? I would love to blame the bankers for pricing it so low, but it was already well above Google and Yahoo! valuations when they did they deal, so I am sure that, when they get sued years from now, that will be a decent defense. And they will get sued, because even though it is a Chinese deal, it's the American way to blame bankers when a stock implodes.

Finally, China? I mean, how much do we have to lose trading Communist stocks, how can we still say, "This time will be different"? Other than Shanda Interactive(SNDA Quote) that market's been almost a total travesty.