By Static Chaos on August 24, 2009 | More Posts By Static Chaos | Authors Website
much(prenominal) has been said about Goldman Sachs (NYSE:GS) by articles like Mr. Matt Taibbi July 2, 2009 gyre Stone article Inside the Great American riffle Machine. But most have not perceive about Goldman Sachs involvement in the initial public oblation ( initial public offering) of Baidu (NASDAQ:BIDU) and the subsequent BIDU share price movements back in 2005 and 2006.
Goldman Sachs and genus Piper Jaffray (NYSE:PJC), along with Credit Suisse First Boston (NYSE:CS), underwrote Baidus initial public offering. The IPO would be the first for a pure-play Chinese search locomotive engine company. Baidu American depositary shares (ADS) started trading on August 5, 2005. An initial 4.04 one thousand million ADSs were offered at $27 per ADS; opened at $66, more than doubling its $27 price, climbed, stabilized and then rallied anew out front windup its historic opening day at $122.54.
With a tog up of 354%, Baidus first-day gain ranks 18th in history and ranks as the best performance ever by an overseas deal. At its IPO price of $27 a share, the company raised $109 million. Part of the big debut-day move from Baidu.com can be traced to the comparatively small size of the deal. With only 4.
04 million shares in the IPO and strong indications of interest from both retail and institutional investors, affect had driven up the price throughout the process. The widely circulated hearsay at the time that Google (NASDAQ:GOOG) had attempted to buy the firm provide interest in the stock and gave investors confidence in it as well.
Typically, underwriters would only be overjoyed when a stock they took IPO shot up like this in its debut. But the cut of action Goldman and Piper Jaffrey took next was totally unprecedented and all in all out of character for investment bankers.
Forty days after Baidu went public, the minimum period before an underwriting firm can wipe out an analyst report, on Sep. 14, 2005, at 6:00 am before the market opened,...If you want to get a full essay, smart set it on our website: Orderessay
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