Baidu was hit by a short once again.
On Thursday’s U.S. stock close (March 26, Beijing Time), Baidu closed down 14.47 percent, with shares at $204.57 and a total market capitalization of $72.34 billion (about RMB 473.479 billion).
This follows an 8.55% drop on Wednesday. Taken together, in just 2 trading days, Baidu fell a combined 21.78%, evaporating a total market cap of about $20.144 billion (about RMB 131.84 billion).
Looking at the stock price trend in the past 1 month, Baidu’s stock price has been on a downward path since February 22, when it hit a high of $354.82.
From February 22 to March 26, Baidu overall fell about 42.34%, the total market value evaporated about $ 53.124 billion (about RMB 347.707 billion).
Baidu’s share price has fallen more than 20%, entering a technical bear market, and the reason for the downturn is related to 2 reasons.
The first is a US factor, namely the US Securities and Exchange Commission (SEC) passing the Foreign Company Accountability Act, which is believed to target mainly Chinese companies listed in the US. With the introduction of the bill, Chinese stocks fell en masse. For example, on Wednesday, popular Chinese stocks such as Tencent Music, Vipshop, Funky Headlines, Azure, Ideal Auto and Xiaopeng Auto fell by more than 10%.
The second is the market speculation about Baidu’s “self-driving” concept, the stock price after a sharp rise in favor of the phenomenon of cash.
Public data shows that Robin Li holds 17% of the shares of Baidu. When Baidu’s share price was $354.82, the market value of Robin Li’s shares was $21.328 billion. When Baidu fell to $204.57, the market value of Li’s shares was $12.297 billion. It is easy to see that with the fall of Baidu’s share price, Robin Li’s value has shrunk by about $9.031 billion (about RMB 59.109 billion).
We are also concerned that Cathie Wood (female), known as the “Queen of Bulls”, is a well-known investment fund manager of Baidu, previously known for her big position in tesla.
According to media reports, as of Jan. 12 this year, her three ETFs together held over 3.32 million shares of Baidu stock. Roughly calculated, from Feb. 22 to March 26, the market value of Cathie Wood’s fund holdings shrank by about $498.8 million (about RMB 3.264 billion).
K-line data shows that Baidu’s share price has experienced a wave of surge since November last year, with the share price rising from around $130 to a maximum of $354.82, or more than 160%.
One of the logic of market hype Baidu is the concept of “autonomous driving” and “chip” concept.
In December last year, Baidu’s Apollo was exclusively licensed to test driverless cars in Beijing. In January this year, Baidu officially announced that it would cooperate with Geely Holding Group to form an intelligent car company and enter the auto industry as a vehicle manufacturer.
In addition, in February this year, Baidu announced that its self-developed cloud general-purpose chip Kunlun 1 was widely deployed in scenarios such as Baidu’s search engine and intelligent cloud eco-partners. It also said that the next-generation 7nm Kunlun 2 chip will also be put into mass production soon.
With Baidu’s efforts in autonomous driving and chips, the capital market also has changes in its pricing.
And in the process of Baidu’s stock price rise, Cathie Wood continued to increase its position also further stimulated the market to do long sentiment.
However, after a short-term rally, the company began to “lose its color” in the secondary market. In addition to the continued decline in the U.S. stock market, the company also performed poorly in Hong Kong.
On March 23, Baidu was officially listed on the Hong Kong Stock Exchange at HK$252 per share, becoming another Chinese stock back in Hong Kong. However, on the first day of listing, Baidu fell below the issue price. As of the posting on March 26, Baidu’s share price in Hong Kong has fallen below the HK$210 mark.
In fact, Baidu is a controversial listed company with fierce disputes between long and short views.
Optimistic parties such as Cathie Wood, who has said, “Capital markets will fund the transition of cars from internal combustion engine powered to electric. We think it’s still Tesla in the U.S., and China could produce the next big winner. If we had to say which Chinese electric car brand we have the most confidence in, it would probably be Baidu.”
Cautious parties such as investors in the Scale shareholder group. A shareholder said, “Baidu’s current autonomous driving has only a large amount of investment, not generated revenue, and needs future verification, the current sharp fall is very normal! The future share price will be dependent on the self-driving revenue, into the validation phase, there is a certain degree of uncertainty.”
At present, Baidu is facing a single source of business revenue, Aiki is facing huge losses, and the acquired YY Live is facing integration and other problems.
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