I have never had nice things to say because not once have I heard anybody in management or the controlling shareholder group or Wall Street analysts ever say one word of caution with respect to the over-the-top enthusiasm for the stock, right from the get-go.

They in fact built that enthusiasm. It's what stock promoters do.

But there ought to be a point where common sense takes over.

Maybe you recall when at the peak of the 1999-2000 Bull Market, Microsoft's Steve Balmer warned his shareholders that the market had gone bonkers. I thanked him for that. I also recall writing in my blog at the time that Bill Gates in a couple hours of trading had seen his personal wealth grow by greater than the GDP of Portugal that year. Really.

There is never a point in trading securities where common sense and prudence can be missing.

Do you recall Maria Bartiromo sitting in the garden interviewing the venture capitalist behind this Baidu deal, being oh so nice? The stock had IPO'd at 27; first ticked 66; first-day high 154; closing bid 123.65; first-day volume 22,681,123, and closed with an opening-day gain of +354 pct.

Then the stock went into the tank, and the promoter came on the air to ask his shareholders not to panic. Maria took everybody along for the ride.

For somebody who calls herself an objective journalist, that was not a shining performance. Sitting in the garden with Maria and the vc, it was just sell, sell, sell -- a sophisticated sell, by a sophisticated gentleman and a willing accomplice.

BIDU was down another -5 pct today (a lot to do with GOOG); but what's another 5 pct, huh? It's only somebody's hard earned money, that's all.

Do you think that vc guy has lost dime one on this deal? I hardly think that's likely.

All I can do is warn people at $145, and at $120, and at $81, etc, and hope they are not still holding on at $51. That by the way, is a return OF capital, not a return ON capital.

And when traders were giving it back, you know who was taking it.

That's what sophisticated people do.

---

Sent to us from "Ilovemydog", which helps to explain why the price fell so quickly: the insiders were selling, and were doing so faster than the buyers of the IPO had been led to believe.

BEIJING, Dec. 13 /PRNewswire-Xinhua/ -- Baidu.com, Inc. (Nasdaq: BIDU - News), the leading Chinese language Internet search provider, announced today that Goldman Sachs (Asia) L.L.C. and Credit Suisse First Boston LLC, co-lead underwriters for Baidu's IPO in August 2005, have decided to release a total of up to three million outstanding ordinary shares from lock-up restrictions, effective from December 19, 2005. This early partial release will allow each shareholder who is subject to lock-up restrictions to sell, transfer or otherwise dispose of part of its shares on a pro rata basis as determined based on the number of shares held by such shareholder and the total number of shares held by all the shareholders subject to lock-up restrictions as of December 2, 2005. With respect to the shareholders who are currently subject to the standard 180-day lock-up restrictions, all of their remaining shares will be released upon expiration of the 180-day lock-up period. In addition, the co-lead underwriters have agreed to release from the lock-up restrictions 25% of the shares held by each shareholder who is currently subject to the extended lock-up restrictions beyond the standard 180-day period, beginning on the 180th day after August 4, 2005, and to release all the remaining shares held by such shareholder beginning on the 360th day after August 4, 2005. The underwriters' original lock-up restrictions on Baidu's ordinary shares are detailed in Baidu's IPO prospectus, available at http://ir.baidu.com.