Baidu List
Given the decision to pursue an initial public offering, on what exchange should Baidu list? What factors contribute to that decision? What are the advantages and disadvantages of listing on the NASDAQ?
Baidu listed on the NASDAQ Stock Market to pursue an IPO.
1. Since Baidu was technically a wholly foreign-owned company (registered in the Cayman Islands), the company was ineligible for listing on either the Shanghai or Shenzhen exchanges. As such, the key listing alternatives for Baidu were the NASDAQ Stock Market, the Hong Kong Stock Exchange, or the London Stock Exchange.
2. Compared to Hong Kong or London, there were more securities analysts covering NASDAQ-listed companies.
3. Relative to the investor bases in London and Hong Kong, buyers of NASDAQ-listed stocks were more likely to take risks on a company with a short track-record of profitability.
4. Hong Kong had very stringent requirements for companies listing on its exchange; more prominently, companies had to show a three-year profit record to be eligible for listing.
Advantages：
1. Since Baidu was technically a wholly foreign-owned company (registered in the Cayman Islands), the company was ineligible for listing on either the Shanghai or Shenzhen exchanges. As such, the key listing alternatives for Baidu were the NASDAQ Stock Market, the Hong Kong Stock Exchange, or the London Stock Exchange.
2. Listing Baidu on NASDAQ would offer them a technology-related valuation premium.
3. Listing on NASDAQ often received better valuations in terms of traditional valuation metrics(e.g., price to earnings ratios).
4. Compared to Hong Kong or London, there were more securities analysts covering NASDAQ-listed companies. Hong Kong had very stringent requirements for companies listing on its exchange; more prominently, companies had to show a three-year profit record to be eligible for listing.
5. Relative to the investor bases in London and Hong Kong, buyers of NASDAQ-listed stocks were more likely to take
Baidu listed on the NASDAQ Stock Market to pursue an IPO.
1. Since Baidu was technically a wholly foreign-owned company (registered in the Cayman Islands), the company was ineligible for listing on either the Shanghai or Shenzhen exchanges. As such, the key listing alternatives for Baidu were the NASDAQ Stock Market, the Hong Kong Stock Exchange, or the London Stock Exchange.
2. Compared to Hong Kong or London, there were more securities analysts covering NASDAQ-listed companies.
3. Relative to the investor bases in London and Hong Kong, buyers of NASDAQ-listed stocks were more likely to take risks on a company with a short track-record of profitability.
4. Hong Kong had very stringent requirements for companies listing on its exchange; more prominently, companies had to show a three-year profit record to be eligible for listing.
Advantages：
1. Since Baidu was technically a wholly foreign-owned company (registered in the Cayman Islands), the company was ineligible for listing on either the Shanghai or Shenzhen exchanges. As such, the key listing alternatives for Baidu were the NASDAQ Stock Market, the Hong Kong Stock Exchange, or the London Stock Exchange.
2. Listing Baidu on NASDAQ would offer them a technology-related valuation premium.
3. Listing on NASDAQ often received better valuations in terms of traditional valuation metrics(e.g., price to earnings ratios).
4. Compared to Hong Kong or London, there were more securities analysts covering NASDAQ-listed companies. Hong Kong had very stringent requirements for companies listing on its exchange; more prominently, companies had to show a three-year profit record to be eligible for listing.
5. Relative to the investor bases in London and Hong Kong, buyers of NASDAQ-listed stocks were more likely to take