One Crazy Night: The Thrilling Story Behind Baidu's 354% NASDAQ Debut
Key Takeaways
- For a truly valuable company, its stock price may fluctuate in the short term, but it will always return to the real value it creates for society in the long run.
- The capital market is essentially a vote on a company's future growth potential. A compelling story with room for imagination can move investors more than a stable but dull financial report.
- An IPO is not the finish line; it's the starting line. It brings not only wealth but also immense responsibility and the pressure of constant public scrutiny.
Prologue: The "China Story" on Wall Street
In the summer of 2005, Robin Li and his team were on a grueling expedition: the Baidu IPO roadshow.
They shuttled between the skyscrapers of Hong Kong, New York, and Boston, telling and retelling an internet story from China to the fund managers who controlled the flow of global capital.
However, the process was far more difficult than they had imagined.
At the time, although Baidu already had leading traffic in the Chinese market, the company was still unprofitable. Its core "pay-for-performance" business model was also viewed with uncertainty by many American investors.
"How are you different from Google?" "How will you consistently make money in China's complex market environment?" "Why should we believe you can keep winning?"
In closed-door roadshow meetings, Robin Li was constantly bombarded with sharp, skeptical questions. On several occasions, facing the doubtful eyes of his audience, even he began to waver, worrying that Baidu's stock would ultimately be left unwanted.
To boost market confidence, on the advice of their investment bankers, they repeatedly lowered the initial price range for the offering.
No one could have predicted that just a few days later, they would personally ignite a firework display of wealth that would stun the entire global financial market.
Act I: From Unwanted to Unobtainable
The turning point came at the final stop of the roadshow.
In simple yet passionate language, Robin Li described the enormous potential of the Chinese internet and the unique value of Baidu as the gateway to the Chinese-speaking world. He didn't dwell on financial data, instead focusing on two words full of infinite imagination: "China" and "search."
"Investing in Baidu is investing in the future of China." This simple sentence finally ignited the investors' enthusiasm.
After the roadshow, subscriptions for Baidu's stock began to grow explosively. Orders poured in from all directions, and a blizzard of emails and phone calls overwhelmed the investment bank's staff. The planned offering was oversubscribed by hundreds of times in just a few days.
Baidu's stock went from being unwanted to an unobtainable "luxury item" in an instant.
Finally, on the night before the IPO, the investment bank raised Baidu's offering price from the initially planned $19 all the way up to $27. Even then, countless funds were waving checks on the sidelines, desperate for a piece of the action.
A market frenzy was about to be unleashed.
Act II: The Insane 354%
On August 5, 2005, at 9:30 AM Eastern Time, the NASDAQ opening bell rang. Baidu, the search engine company from China, was officially listed for trading under the ticker symbol: BIDU.
Robin Li and his founding team gathered in the NASDAQ trading hall, nervously watching the giant electronic screen.
Due to the overwhelming demand, Baidu's stock did not have an opening trade price for a long time after the market opened. As the minutes ticked by, the trading floor grew eerily quiet.
Suddenly, a gasp erupted from the crowd.
The screen flashed Baidu's first trade price: $66!
The number was 144% higher than the $27 offering price. Robin Li and Eric Xu embraced in excitement.
However, this was only the beginning of the madness.
Over the next few hours, Baidu's stock price shot up like a rocket: $70, $80, $100... Every jump of the green numbers on the screen sent a jolt of adrenaline through everyone watching.
By the end of the day, Baidu's stock price closed at $122.54.
The gain was a staggering 354% from its offering price.
This figure set a record for the highest first-day gain for a foreign company IPO in the US market in five years. Baidu had achieved legendary status in a single day.
That night, 37-year-old Robin Li and his seven early partners became billionaires overnight.
Epilogue: After the Bell
After the bell-ringing ceremony, Robin Li didn't join the celebration parties. He quietly left the NASDAQ building and wandered the streets of New York's Times Square for a long time.
The immense wealth and honor that descended upon him overnight brought him not only joy but also a sense of unreality and unprecedented pressure.
He later recalled, "The moment the opening bell rang, it meant Baidu had transformed from a private, startup company that could make mistakes into a public company. From that moment on, our every move would be under the spotlight, scrutinized by everyone. For me, it was a new beginning, and the start of an even greater challenge."
That insane IPO provided Baidu with ample resources and propelled it to the throne of the Chinese internet. But for Robin Li personally, that day was perhaps the true beginning of his "coming of age" as an entrepreneur.
Because he knew that after the bell, there was no turning back.