NEW YORK (AP) — Shares of Baidu Inc. slid Tuesday after a Credit Suisse analyst downgraded the Chinese Internet company, citing concerns over a weaker-than-expected advertising market and growing competition.
THE SPARK: The analyst, Wallace Cheung, cut his rating to "Underperform" from "Neutral" and cut his target price to $83 from $118.
THE ANALYSIS: Baidu got a boost when Google Inc. left China in 2010, but its "monopoly is waning," Cheung said in a note to investors. He said the company had to face newer rivals such as Qihoo 360 Technology Co., and it has had a hard time making money from mobile search. He also said the overall ad market is weaker as the Chinese economy slows down.
SHARE ACTION: Baidu's U.S. shares fell $813, or 7.1 percent, to $106.16 in afternoon trading. The stock has traded in the 52-week range of $99.71 and $154.15.