Shares of Baidu, Inc. (NASDAQ: BIDU) touched a new life-time high of $148.92 on Monday, after media reports that Facebook Inc. signed an agreement with the company to set up a social-networking website in China.
The agreement followed several meetings between the companies’ chief executive officers, Sohu.com reported citing unidentified Baidu employees.
Facebook is evaluating the Internet market in China but the social networking giant has not signed a business deal with any companies there, a Reuters report quoted citing source familiar with the matter.
We view Facebook entering China as a positive headline for Baidu shares. Like Google (NASDAQ; GOOG), Baidu has been unable to bear any fruits in social media. Baidu may have a chance to achieve a meaningful presence, with the help of the Facebook brand name, Susquehanna Financial analyst Ming Zhao wrote in a note to clients.
Facebook said in a statement on Monday that the company is currently studying and learning about China, as part of evaluating any possible approaches that could benefit our users, developers and advertisers.
Facebook, which has more than 500 million users, has been banned since 2009 in China, where the government exercises tight control over online information. The company opened a sales office in Hong Kong this year.
A Baidu and Facebook partnership has substantial potential. We view such deals with skepticism since similar joint ventures involving U.S. and Chinese companies to pursue opportunities in China historically have not been very successful, Scott Kessler, a technology analyst with Standard & Poor’s in New York, told Bloomberg.
The Beijing-headquartered Baidu stock gapped open sharply higher April 11 at $147.41 compared to previous day's close of $141.88. The stock touched a new all-time high of $148.92 on Monday.
The stock closed Monday's regular trading up 2.68 percent at $145.68 on the NASDAQ Stock Market with a volume of 16.62 million shares, while in the after-hours the stock declined 0.05 percent to $145.60. The stock traded between $60.22 and $148.92 during the past 52 weeks.