bidu #1 Balanced_options "pump the stock and dump the OTM option

http://seekingalpha.com/article/240051-the-baidu-bubble-destroys-any-real-valuation

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Balanced_options

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(4 comments)Send MessageMy view of bidu's recent run is that, it has a perfect story for the MMs to make big bucks from you, the average investors.

1. The story is good. China, the so-called China Internet Population, dominance due to GOOG exit, market cap/valuation comparison to GOOG (which in itself is a fallacy since GOOG has technologies and innovations, other than search, BIDU does not, but I digress).
2. A company indeed with good earning track records, possibly the mgmt team working in concert with the MMs.

If you look at the hourly price charts since it's 10-1 splits, and the amazing option volumes for both weekly and monthly options.
you'll understand why BIDU is the darling of Wall street.
Every week before Dec when they stop offer weekly options, you'll see this constant reply of the game of "pump the stock and dump the OTM options, then flush the stock and sweep up the OTM options".

My reading of the 10-1 split is not the bullsh*t argument of 'making it more affordable to the general public". It's for the MMs to make more money out of its option market! Otherwise, why is it that a Chinese ADR will constantly command top spots on the option active list, along with companies like BAC, C etc.
Even GOOG and AAPL do not enjoy such elite status....


There's really no point looking at BIDU from valuation viewpoint, it does not matter. As long as they're with no creditable competitors in China, and as long as they can maintain the 1 to 2c earning beats, the con game will continue.

All I am saying is, buyer beware!

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