Wednesday, September 14, 2005

Baidu's Amazing 72 Hours (9/9/05)

When he received the invitation mail from Yanhong(Robin) Li for a trip to the US, Sheng Bi had already quit his position as general manager of marketing of Baidu. His only title left was the strategic consultant.But Robin insisted on inviting him to "co-witness the historic moment of Baidu's IPO".

Sheng Bi sensed the first good omen when he went to get a visa. At the American Embassay in Beijing, the visa officer, who is an African American, started asking interesting questions: "Can I buy some of your stock?" and "How do you value yourself compared to Google?".

Aug. 4, holding his ticket for China Air International flight 981, sheng Bi went to the Airport. At the entrance, he met one of the Baidu's founders, Yong Xu. Like Bi, Mr. Xu is also no longer working at the company. Seeing all the "Ge Men" ex-Baiduers get invited, Sheng felt deeply moved. Robin cares about his friends!

"When we left Baidu, we more or less knew the IPO's coming. For me, this already can be counted as a successful career. However, I got worn out, so I decided to quit." Sheng explained. "For Robin though, Baidu is his life!"

Sheng still remembers that in the beginning of 2002, Robin Li decided to change Baidu into a public brand instead of a search provider for the major portals. Sheng decided to join Baidu. "Robin asked me, here is your choice: Do you want higher salary, lower stock grants, or the other way around?"

"I told him: I'll chose NO salary, but higher stock grants".

It was already evening when they arrived at Kennedy Airport in New York on Aug. 4. He was then on the way to Mannhattan. At the same time, Robin Li and Baidu's CFO Shawn Wang were having the final meeting at the office of Goldman Sachs. Sheng Bi found out that night that the IPO had been priced at $27 per share.

"I think the price was a reflection of Robin's firm and humble style. It also reflected the degree at which we value ourselves," said Bi. Of course, nobody at the time could have imagined what would happen the next day.

On the morning of Aug. 5, Bi and Xu were picked up at the Palace Hotel on the 50th street and driven to One New York Plaza where Goldman Sachs’ office is located.

"Many people were in the office, including an old American guy. He was the one who gave Robin the initial fund of $600,000 for starting Baidu. He was dancing around the room and asking everyone to write down their guesses for Baidu's first closing price." Sheng made his guess at $48 per share.

About 10:00 AM New York time, Aug. 5, Shawn Wang, Sheng Bi, Baidu's general manager of investment, He Kun, Robin and his wife as well as Yong Xu and his wife all came to the trading office on the 49th floor. Accompanying them was the CEO of Goldman Sachs.

"Robin did not talk that much. He was very cool. You couldn't sense any nervousness from him. This goes along with his low-key style."

Interestingly, the chief trader for Baidu's IPO on the first day was the same trader who had opened Google's IPO trading.

Trading started. The chief trader held the phone in one hand and a mouse in the other hand, his eyes scanning the bidding prices on the screen, while the newest bidding prices popped out of his mouth.

The first round of applause came when he reported 35, then 39. Less than a minute later, everyone was "astonished" when he said 45, 49. Sheng took a look at Robin. His eyes were wet. Then he looked at Yong Xu, tears were streaming down his face. The performance of Baidu was glorious for the Chinese.

The price was still climbing up. "When I looked at the trader, he was scared! His whole body was shaking when he reported 72", Sheng said. "At that time, he could barely respond. The first deal was made around 11:35. Baidu opened for trading at $66 per share. In fact, at that time, the bidding price was way over 70".

The applauses and cheers finally broke out. Everyone was hugging each other. One guy said quietly, "Finally I'm out of poverty".

Around 2:40 PM, Sheng and Yong were on their way to the Nasdaq. The radio reported that Baidu hits a price of $140 per share. Sheng said to Yong Xu, "I hit the jackpot!"

Finally they arrived at the Nasdaq building. The trading center is on the 43rd street in Manhattan. It's near an intersection next to the famous Broadway. Many people were streaming around. In front of the giant screen outside on the wall, many New Yorkers and visitors were watching. It was showing the fluctuating, but climbing prices with the giant Baidu logo side by side with the entered keywords by Chinese net surfers at that moment. (12 pm Beijing time).

"We cheered, and took some photo shots. An American saw us so he came closer and started chatting with us." Sheng recalled. He asked if we were from the company. When we said yes, he told us "It's a big day for you!” Then he asked for a joint photo with Robin when he found out that he's the CEO.

At 3:00 sharp, Robin Li led the group into the trading hall of Nasdaq to practice the final ring. At 4:00 pm, Robin rang the bell to close the trading day on Nasdaq. At the closing bell, Baidu closed trading at $122.54 per share, which values Baidu at $3.958 billion.
At that moment, with his 22.9% ownership, Robin's total asset value passed $900 million . Also at the same moment, dozens of multi-millionaires were born at Baidu in China and hundreds of millionaires were also born.

"By that time, everybody was extremely tired. Even the least tired one had not slept for more than 30 hours. By 6:30 pm, no one was missing from the celebration banquet at BlueFin restaurant though," Sheng Bi said. "That night the party went on until 11:30 pm. Investors, Baidu team, underwriters gave speeches in turns. Everyone claimed Baidu had made a miracle. However, Robin's speech was the shortest. He said only one sentence: Thank You!"

After the banquet, everyone went back to his hotel but no one could fall asleep. Robin could not fall asleep either. So he gathered Yong Xu, Sheng Bi and several others to the cafeteria by the big hall in Ritz Carlton hotel to have a chat. "The waiters recommended all kinds of wine to us, but we only ordered Chinese tea and it was Beijing's jasmine tea!"

The chat went on until about 2:00 the next morning. Robin Li told us what to do next. "He talked briefly about how to face the media when going back home, and said everything should be operated normally", Bi recalled. Robin had returned to his cool self.

Aug. 6, Robin slept the whole day in the hotel. Sheng Bi could not rest much; he put on regular clothes and started touring New York. In a teahouse in the China Town, the owner recognized him. "The restaurant owner said many nice words. He said every Chinese living here was talking about Baidu's stock. They were all very proud of the Chinese company. He even gave me a 20% discount".

Aug. 7, Bi decided to fly back to Beijing from New York. Before leaving, he called Robin. "He did not say much besides that he wished me a good trip and that we would get in touch when we’re both back in China. He is very shy, and a true gentleman".

On the China Air's plane, Bi fell asleep. He was awakened by an elbow from the old lady sitting next to him. "Look, you are on TV!" She pointed to the TV program from CCTV4. She was traveling with her son and daughter. "She was pouring out questions and chatted with me the whole way back".

Back in China, Bi received an email from Robin Li, "he saw that all the media in China were discussing Baidu's stock prices. He was slightly upset that no one even mentioned that it was a meaningful event for China and its IT industries. He actually felt much more overwhelmed in the US".

Aug. 10, Robin Li left for China. He arrived in Beijing the early morning on the 11th. At that time, Baidu's share had dropped under $90.

(Hu Jie)


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