BIDU

Baidu, Inc.

TMT


Presented:06/02/2016
Price:$175.64
Cap:$60.92B
Current Price:$93.97
Cap:$27.45B

Presented

Date06/02/2016
Price$175.64
Market Cap$60.92B
Ent Value$61.17B
P/E Ratio11.74x
Book Value$36.75
Div Yield0%
Shares O/S346.82M
Ave Daily Vol3,353,826
Short Int1.77%

Current

Price$93.97
Market Cap$27.45B
Baidu, Inc. engages in the provision of internet search solutions and online marketing solutions. The company also operates an e-commerce platform with an online payment tool, develops and markets web application software, and provides human resource related services. Its products include search products and web directory, search-based community products, mobile search, related products and services for websites and enterprises, e-commerce, entertainment products, software and related search products. The company was founded by Yanhong Li and Xu Yong on January 18, 2000 and is headquartered in Beijing, China.

Publicly traded companies mentioned herein: Alibaba Group Holding Ltd (BABA), Alphabet Inc (GOOG), Amazon.com Inc (AMZN), Baidu Inc (BIDU), Qihoo 360 Technology Co Ltd (QIHU)

Highlights

On April 12, 2016 a 21 year old Chinese student named Wei Zexi succumbed to a rare form of cancer, and Baidu’s (BIDU) advertising policy has been blamed for leading him to an expensive, experimental treatment at a hospital that paid-up for advertising on the search engine. Healthcare advertising is one of BIDU’s largest advertising revenue streams, and the “Wei Zexi incident” has created a headwind that the presenter thinks will impact the company’s earnings power and result in downside for stockholders over the next 6 - 12 months. It may be severe enough to impact BIDU’s dominant market share position as well. As such, he is short the stock. The public’s discontent has led to the regulators stepping in, and now in addition to having to spend “massive” amounts of money on online-to-offline (O2O) and R&D to defend its market share in China (against Sogou and 360), the presenter sees BIDU’s healthcare advertising revenue at risk of a material decline.

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