Shares of China's largest web search company, Baidu.com, more than quadrupled in value in their US market debut in the most spectacular entry ever by a foreign company, overshadowing world search leader Google's float last year.
The meteoric debut of the Beijing-based company fed by investors hungry for a growth story was reminiscent of the internet heyday, when shares of new online and technology companies routinely trebled on their first trading day.
Baidu.com's float, with its irresistible mix of China and the internet, sparked huge interest globally, with the company described as a potential Chinese Google well placed to serve the world's most populous country, where web use is surging.
But even analysts expecting a strong debut were stunned as Baidu.com shares more than quadrupled the $27 (€22) per American Depositary Share (ADS) pricing of its initial public offering (IPO), the first US listing of a pure-play Chinese search engine.
"It's just been amazing. It could be over-enthusiasm, it could be the way Google charted, but there is obviously a lot of speculative buyers who think this could be an Asian Google," said Sal Morreale, who tracks IPOs for Cantor Fitzgerald.
Baidu.com shares surged over 450 per cent to a high of $151.21 on the Nasdaq on Friday. They closed up almost 354 per cent at $122.54.
But analysts questioned Baidu.com's valuation, which is largely based on the assumption of strong growth in China.
Baidu.com's ADSs are trading at 279 times its 2004 revenue of $14.2 million, while Google's comparable multiple is 26 on 2004 revenue of $3.2 billion.
"It's dangerous to predict the future, but every one of the IPOs that went up more than 300 per cent on the first day has ended badly for investors," said University of Florida Professor Jay Ritter, an IPO expert.
