Could Baidu (BIDU) shares hit $1,000?
Well, it looked that way for a while, and as Daily Finance notes today, at least one analyst this week slapped a $1,000 price target on the shares. But the stock is not going to get there: the company this week announced that effective May 12 it will reset the ratio between its Class A ordinary shares and its American depositary shares. Before, one ADS represented one Class A share; effective May 10, each ADS will represent one-tenth of a Class A share.
That sounds complicated, but what it means is that Baidu is splitting the U.S.-listed stock 10-for-1.
CEO Robin Li said on the company’s post-earnings conference call that the split “will give us greater flexibility to attract and retain the best people,” adding that “Most employees are like retail investors. We like to hear a bigger number of shares, so I think that � also helps them to decide every month when something gets vested that they can manage that in the easier way, so that’s the reason we are splitting the ADS.”
So you have to wonder, if Baidu is splitting…what about Google (GOOG)? Will they ever split? Even Warren Buffett is doing it; in fact the last time I raised this question about a Google split was when Berkshire Hathaway in January split its B shares 50-for-1.
In today’s trading:
- BIDU is down $19.92, or 2.8%, to $689.95
- GOOG is down $4.78, or 0.9%, to $527.22.
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