Baidu.com, Inc. (ADR) (BIDU)

I am short BIDU at $442, humble, & patient. Here are some of the reasons I believe that I will prevail in making a profit. Also, please inform me if there are reasons I have missed, thank you.

1.   By BIDU’s own admission issues with its Phoenix Nest internet advertisement conversion will persist into 2010 (http://www.chinadaily.com.cn/cndy/2009-10/28/content_8858862.htm)
2.   Last earnings report, BIDU stock declined over 20% - many of the same issues exist today
3.   Recent stock price run-up not fundamentally based, in my view
4.   COO & CTO depart within 10 days – see: http://ir.baidu.com/phoenix.zhtml?c=188488&p=irol-irhome
5.   Sr. mgmt is further confirmation of major technology misstep, in my view
6.   2010 P/E of over 50x & a growth rate slowing into the mid-thirties for revenue
7.   Revenue & earnings growth declined sharply in 2009 (http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_B/threadview?m=tm&bn=22855&tid=296422&mid=296422&tof=-1&rt=2&frt=2&off=1)
8.   2010 outlook uncertain due to technology conversion
9.   4Q09 & 2010 EPS expectations reduced dramatically following 3Q09 results; any disappointment on already lowered results would crush the stock (http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_B/threadview?m=tm&bn=22855&tid=296519&mid=296519&tof=-1&rt=2&frt=2&off=1) & IMPORTANTLY (http://messages.finance.yahoo.com/Stocks_%28A_to_Z%29/Stocks_B/threadview?m=tm&bn=22855&tid=296793&mid=296793&tof=-1&rt=2&frt=2&off=1)
10.   Chinese gov’t cracking down on illegal websites closing thousands & making opening a website more challenging.
11.   Chinese gov’t concerned about bubbles & recently raised a key interest rate & reserve ratios to apply the breaks on the economy. Need more proof – see another sharper Jan. 19, 2010 interest rate increase: http://finance.yahoo.com/news/China-Taiwan-wary-of-bubbles-rb-3358832004.html?x=0&.v=2
12.   Move to Phoenix Nest system very disruptive for BIDU’s customers.
13.   Risk that GOOG may yet decide to stay in China – in fact they have reported that they seek & expect to have discussions with gov’t: (http://www.bloomberg.com/apps/news?pid=20601170&sid=aREgM8FvboOM).
14.   GOOG may be smarter than we think. Its timing to take a stand is good with its biggest competitor having problems. Might we look back at this incident and see genius. However, far from over, the delay of its mobile phone launch raises ?’s (http://finance.yahoo.com/news/Google-postpones-mobile-phone-apf-3717963387.html?x=0&sec=topStories&pos=1&asset=&ccode=)
15.   BIDU is priced for perfection
16.   Some stuff on this blog: http://baidu-news.blogspot.com/
17.   GOOG less expensive than BIDU on a fundamental basis – with more diversified revenue streams
18.   BIDU – should get a corporate governance discount
19.   BIDU – ownership & legal structure – investors don’t have a claim on key business licenses or profits/dividends in order to comply with Chinese laws to sell stock offshore
20.   The leading “investment thesis” of many that believe BIDU shares will trade higher is that the stock is going up or its CHINA
21.   Competition higher & taking advantage of Phoenix Nest misstep, see: (http://www.ft.com/cms/s/0/4a108e44-044d-11df-8603-00144feabdc0.html?referrer_id=yahoofinance&ft_ref=yahoo1&segid=03058&nclick_check=1) & MSFT (https://news.fidelity.com/news/news.jhtml?articleid=200912290401RTRSNEWSCOMBINED_TRE5BS0V6_1&IMG=N&cat=Top.Investing.RT&ccsource=rss-Top.Investing.RT)
22.   BIDU is losing search market share in China – see compelling chart at: http://gs.statcounter.com/#search_engine-CN-monthly-200906-200912%20
23.   BIDU has yet to be able to move meaningfully into new markets outside of China. Recently BIDU denies recent rumors about expansion in Europe: http://searchengineland.com/baidu-calls-european-expansion-rumors-groundless-11417
24.   In my view, markets up significantly & due for a pull-back – economies not recovered, sovereign debt risks & other geopolitical factors not discounted properly
25.   Technically, I think BIDU will retest lower levels – does anyone a technical analysis on BIDU?
26.   Most Wall Street Analysts have moved price targets up & are bullish – few discount GOOG staying, BIDU’s recent technology challenges, the departure of senior executives, the recent run-up in BIDU’s valuation, etc.
27.   Mounting media focus on potential troubles at Baidu, see: http://www.theepochtimes.com/n2/content/view/28203/ and http://online.wsj.com/article/SB10001424052748704541004575010542693689462.html?mod=WSJ_business_whatsNews
28.   BIDU to be sued - http://www.techsecuritychina.com/2009/12/22/9036-shanda-literature-will-sue-baidu-com-in-january-2010/
29.   Interesting perspective on timing of BIDU departures & events at Google: http://www.techcrunch.com/2010/01/18/baidu-cto-quits/
30.   BIDU hacked & lost service to users recently – may have role in Sr mgmt departures: http://www.cso.com.au/article/332212/group_behind_twitter_hack_takes_down_baidu_com?fp=4194304&fpid=1
31.   Catalysts – the recent 2nd Sr mgmt departure, GOOG’s decision, BIDU’s upcoming 4Q09 & 2009 earnings report, broader market challenges, major corporate failures (e.g., JAL - $25B in debt, now just a $120M mkt cap, lost 90% of its value in a week), & other