Baidu, Baidu, Baidu. What will we do with you? You’re too darn ubiquitous, useful and interesting an outfit to ignore, yet not quite obscenely profitable enough to meet investors’ unrealistic expectations. Maybe you can look elsewhere for inspiration on how to proceed now that 3.3% profit growth will no longer pass muster with the boys on Wall Street.
We suppose electronics retailer Gome is facing downward pressure on its share price as well, but perhaps it’s best not to take after them. After all, that plunge was precipitated by the company announcing that it would spend, for reasons unclear, $1.45 billion to buy assets from its jailed founder, who is currently serving a 14-year prison term for insider trading and sundry other financial crimes. But we’ll admit, it takes a certain chutzpah to be so blatant. Maybe that’s the ticket–showing a bit of confidence.
Perhaps forgiveness is the order of the day, as it apparently was in Myanmar with the country’s leaders decided to pardon the 155 Chinese loggers they’d jailed (mostly for life) on lumber-smuggling charges. Now, yes, that amnesty coincidentally followed the straining of ties with Beijing, which had all but ordered Yangon to let the incarcerated lumberjacks loose. But it also coincided with a Buddhist religious holiday, so who’s really to say it wasn’t compassion that did the trick?
Or maybe it’s optimism that will really turn things around. This week we learned GlaxoSmithKline’s drug sales in China dropped 14%, but did that get CEO Andrew Witty down? We should think not! No, our man Witty told the media that, dramatically slowing market growth aside, he fully expected the price reductions the firm had made to lead to increased sales volume, and thus raise revenue.
Alright, alright, so resolutely sticking your head in the sand is ultimately just a good way to self-asphyxiate. You’re a business, Baidu, and we suppose cut-throat is the way to go if you’re planning to compete in this P2P, O2O, M2M, C2C, IoT world of ours. How about joining forces with the enemy? With auto sales falling that’s what GM is doing, partnering with the local state-owned automaker SAIC to produce a new line of cars for emerging markets.
Sometimes, we suppose, there’s nowhere better to look for guidance than your own country’s leaders. In this case maybe the best strategy is to follow Beijing’s lead when it comes to stabilizing share prices through sheer, overwhelming monetary might. And well, no, it’s not really working out terribly well. But given that you’ve already announced plans to buy up $1 billion of your own shares as a “show of confidence” in your value, we don’t suppose you’ve got much of a choice now, do you?