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After U.S. markets closed Monday afternoon, Chinese internet search giant Baidu Inc. (NASDAQ: BIDU) announced revised revenue guidance for the current quarter and supplied an update on regulatory agencies’ reviews of some of the company’s business practices. Shares tumbled more than 8% on the announcement.

Most of the company’s sins were forgiven by Tuesday’s opening bell, however, as the stock opened at $159.26 and rose to more than $170 later in the morning, by which time all the company’s sins were forgiven.

The first sin was a reduction in Baidu’s second-quarter revenue estimate from a prior range of $3.12 billion to $3.19 billion to a new range of $2.81 billion to $2.82 billion.

The second sin is an ongoing review of the company’s online marketing practices for medical, pharmaceutical, health care and similar business by government regulating authorities that already have implemented some stricter advertising regulations for medical organizations. Baidu noted:

While the review is underway, the Company has observed a reduction or delay in spend from a significant portion of medical customers. These customers may be in the process of receiving instruction from regulatory authorities, gathering and submitting required documentation and adjusting their practices to comply with new regulations.

While the company said it believes it will emerge from the reviews in a stronger position (could it say anything else?), analysts were less sanguine. Here are some price target changes we saw Tuesday morning:

• Brean cut its price target from $235 to $220 and has a Buy rating on the stock.
• Goldman Sachs sliced its price target from $220 to $200.
• Piper Jaffray cut its price target from $235 to $215.
• Jefferies dropped its price target from $203 to $188 and rates the stock a Buy.

Although these cuts are not exactly good news, investors appear to think that the lower targets still leave a solid upside. The consensus price target on the stock is $205.99, and at this morning’s opening price of $159.26 that represents an implied gain of 29%.

The other possibility, of course, is that short sellers bailed as soon as they could. At the end of May, short interest in Baidu totaled about 8.8 million shares, around 3.3% of the company’s float. Not all that much, but double the number of just two weeks earlier.

Baidu’s stock traded at $163.35 just before noon Tuesday, down about 0.1% for the day in a 52-week range of $100.00 to $217.97.