The bears are piling up on Baidu.com, Inc. (ADR) (NASDAQ:BIDU) .
A whopping 10.6 million shares were sold short as of mid-February according to Nasdaq's latest bi-monthly update. This is nearly twice the number of bearish wagers that were placed on China's leading search engine a year ago. Baidu's short interest hadn't topped 9 million over the past year until now.
The worrywarts appear to be right -- for now.
February wasn't a good month for Baidu.com, Inc. (ADR) (NASDAQ:BIDU). The shares surrendered 16% of their value last month. A poorly received quarterly report early in the month didn't help, and concerns about Qihoo 360 Technology Co Ltd (NYSE:QIHU) gaining ground since rolling out its own search platform last summer continue to linger.
Qihoo 360 reports tomorrow, and it could ding Baidu.com, Inc. (ADR) (NASDAQ:BIDU) if it has some encouraging metrics to offer up on its nascent search initiatives.
This doesn't mean that there aren't a lot of things working in Baidu's favor here.
Then we get to Baidu's valuation.
Baidu's stock may be trading 44% below its all-time peak two summers ago, but the Chinese Internet bellwether is still growing at a healthy clip. The end result is that Baidu is now fetching just 17 times this year's projected profitability and less than 14 times next year's target.