|Instrument:BAIDU INC - SPON ADR|
|Trading Hours (GMT):14:30-20:59|
Headquartered in the Haidian District of Beijing, China, Baidu, Inc. is a global technology company that provides internet search and online marketing services as well as AI solutions. Baidu is the world’s second-largest internet search company, behind only Google, as of October 2021, but it enjoys a market share of about 75% in the lucrative Chinese market. Baidu operates via two business segments: Baidu Core, which constitutes of search, online feeds, and other marketing services; as well as iQiyi, which includes online entertainment services and other types of video streaming content as well as advertisements. Some of Baidu’s products and services include Baidu Search, Baidu App, Haokan, Baidu Cloud, Baidu Brain, Baidu Knows, and Baidu IME.
Baidu was founded in January 2000 by Yanhong Li and Xu Yong. The company’s primary business has been internet search, but competition has emerged from both within and outside the company in recent years. This has seen the company actively diversify away from the segment that has for long been a major contributor to its revenues. Baidu sees its future as being in the AI and the autonomous driving ecosystem. In 2021, Baidu revamped its driverless taxi app, and it launched its first ‘robocar’ as well as its 2nd generation AI chips. The acquisition of JOYY’s live streaming business in 2020 also signals that the iQiyi segment will also continue to receive focus going forward. Baidu will also continue to promote the deep integration of its sticky Mobile Ecosystem as well as enhance its cloud offering. China is increasingly becoming an important player in the global technology space, and Baidu is one of the major companies leading the way.
Baidu went public on August 5th, 2005, listing on the Nasdaq as an ADS (American Depository Share) under the ticker symbol BIDU. Baidu also has a secondary listing on the Stock Exchange of Hong Kong, where it trades under the symbol 9888.
BIDU Stock History
Baidu went public with an IPO price of $27. The company then implemented a 10:1 stock split just five years later (May 2010), which means that the stock started with a split-adjusted IPO price of only $2.7.
BIDU stock has delivered impressive results over the years, but it has also been very volatile. The stock drifted upwards in its early months and managed to hit a peak of circa $40 by December 2007. The 2008 Great Recession then slowed down its march and inspired a dip to lows of circa $10 by December 2008. The BIDU stock then picked up steam and climbed to highs of circa $160 by July 2011. A period of consolidation then followed, before a dip to below $100 in early 2013. The stock then picked up momentum again in mid-2013 and managed to rally to highs of circa $250 by November 2014. BIDU stock then stagnated in the following months before a downtrend kicked in mid-2018 that saw the stock dip to below $100 again in March 2020. However, the stock recovered quickly, with the subsequent rally managing to print its all-time high at circa $355 in February 2021. However, the high levels were not sustainable, and the stock tumbled to around $160 in October 2021.
Baidu has never declared any dividends, but as a growth company, its stock is able to provide investors with immense value gains as its price increases over time.
How to Trade Baidu Stock
Here are some of the factors to consider when trading BIDU stock:
- Regulatory and Legislative Issues
As a tech giant, Baidu faces legal challenges in areas such as data privacy and data collection, security and cloud storage, ethical advertising, as well as intellectual property rights. Beyond that, Baidu is vulnerable to the prevailing regulatory stance of the Chinese government. The company has largely been favoured by China, but the country has in the past changed its stance on other companies such as Alibaba. Regulatory and legislative risk is huge for Baidu both locally and abroad.
- New Product Rollout
Baidu operates in a fiercely competitive industry where emerging technologies and trends such as AI, 5G, Autonomous Driving, and the Internet of Things are inspiring the creation and innovation of new products. A hit new product can be very positive for the company and its stock, whereas a new product miss could be very devastating.
Baidu faces very tough competition to maintain its dominant position in China. Competitors such as TikTok, WeChat, Jinri Toutiao, and Bilibili are already eating into their advertising revenues in China, while internationally, the company has to deal with varied tech giants such as Google, Microsoft, Amazon, and even Tesla in the different industries it operates in. This means that locally, the Chinese government is embracing other ‘national champions’, whereas internationally, Baidu has to compete without the backing or protection of its government.
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