Updated from 1:10 p.m. EDT
A late-session swoon brought shares of
closer to earth Monday.
Shares of the Chinese search engine, which had the best opening day of any IPO in five years, closed down $7.04, or 5.8%, at $115.50 Monday; more than 15 million shares changed hands. The stock went as high as $153.98 earlier in the session.
Baidu was priced at $27 and soared 355% to $122.54 in frenzied trading Friday.
Even with Monday's loss, the company's public float is still worth about $460 million, while its overall market cap remains in the neighborhood of $4 billion. This for a company that did $4.5 million of cash flow in 2004 on revenue of just over $14 million.
Baidu is often described as the Chinese
, a company whose market capitalization has nearly quadrupled in a year to $80 billion. Google had a 2.4% stake in the company and was once rumored to be a potential suitor.
Baidu has grown impressively since being founded five years ago and is currently the second most popular Web site in China. For the current quarter, the company expects to report a nearly 400% earnings increase to $1.5 million on $8.4 million in revenue.
Still, at a little under 300 times last year's sales, the stock has a lot to live up to.
"The speculators are looking at it as another Google and right now the fast money is taking over," Randy Diamond, sales trader at Miller Tabak, said. "Individual investors should stay far away from this stock until it cools off."
Contributing to Monday's early strength was word of an enhanced push by
, Yahoo! is in advanced talks to acquire 35% of Alibaba.com,, which operates auction and trading sites in China. According to the magazine, the deal could be worth $1 billion, making it the biggest investment in China's Internet industry to date.