Does anyone really think GOOG is going to pull all the way out of China?
Remember: pulling all the way out also means closing the door on selling Nexus One to the largest cell phone market on the planet.
So, there is no question that Google will work something out. The only question is exactly how ridiculously overextended will Baidu stock become before it is culled back, and how long that process will take.
My guess is no more than 30 days from now BIDU will mark a return to its pre- January 11 price (approximately $75 lower than where it’s trading as of mid-day today).
How to play… if you missed the dip in Google, you could still buy a very small position and sell on a drop below $573. Or you can short a very small amount of BIDU (and cover after a 50% or so retracement). Or buy a BIDU February put that is a fair distance out of the money, as its fall is likely to be as dramatic as its rise.
Just don’t play too much here; this one is wildly speculative.
Disclosure: As of publication I am short BIDU. I am not a professional, but I am trying this at home. It is highly recommended that you consult a licensed financial advisor or broker before making any and all investment decisions.
Tags: Business And Life by HJ
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