Baidu Stock Slips Despite Buyback, Spin-Off IQiyi Plunges
Baidu (BIDU) stock fell even though the Chinese internet search leader announced a new $ 1 billion stock buyback over the next 12 months.
New York-listed shares in the Chinese internet giant closed down 3.1% to 243 on the stock market today. Baidu’s buyback is smaller than the two-year, $ 6 billion repurchase program announced by e-commerce firm Alibaba Group Holding (BABA) in 2017.
Baidu said the repurchases will be funded from the company’s existing cash balance. The internet company completed an earlier, $ 1 billion share buyback plan in 2016.
Chinese tech companies in general announce fewer buybacks than U.S. counterparts, such as Apple (APPL), which face more shareholder pressure.
Baidu stock is up 39% from a year ago while Alibaba has gained 33%. Chinese stocks have sold off recently amid fears of a trade war with the U.S.
Baidu Stock Retreats From All-Time High
Baidu stock hit an all-time high of 284 on May 16. Shares fell after the company’s chief operating officer, Qi Lu, announced he would be leaving. Shares in the internet search leader are now trading just below its 50-day-moving-average, a bearish signal.
Baidu consolidates the financial results of iQiyi (IQ), a Netflix-like video streaming service. Baidu spun off iQiyi, which is unprofitable, in late March.
The initial public offering raised $ 2.25 billion, with shares priced at 18. Shares in iQiyi surged to 44 on June 18 before retreating. IQiyi stock fell 13% to 31.22 on Wednesday.
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