BIDU - Baidu, Inc.

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
110.54
-0.96 (-0.86%)
At close: 4:00PM EDT
Stock chart is not supported by your current browser
Previous Close111.50
Open111.97
Bid110.58 x 800
Ask110.64 x 1100
Day's Range109.88 - 112.00
52 Week Range93.39 - 234.88
Volume2,983,455
Avg. Volume3,772,820
Market Cap38.528B
Beta (3Y Monthly)1.63
PE Ratio (TTM)8.61
EPS (TTM)12.83
Earnings DateOct 28, 2019 - Nov 1, 2019
Forward Dividend & YieldN/A (N/A)
Ex-Dividend DateN/A
1y Target Est147.04
Trade prices are not sourced from all markets
  • Sarah Ketterer's Favorite Tech Stocks
    GuruFocus.com

    Sarah Ketterer's Favorite Tech Stocks

    3 are among her top 10 holdings Continue reading...

  • Growing Up in a Trade War: China Is Off Limits for This Startup
    Bloomberg

    Growing Up in a Trade War: China Is Off Limits for This Startup

    (Bloomberg) -- The China-U.S. trade war threatens to upend the supply chains of multinational technology companies. But smaller businesses are also getting caught up in the dispute.U.S. startups seeking funding must now consider relations between Beijing and Washington. According to one, that means turning away from Chinese investors and overseas cash in general in favor of raising money in the U.S. It could also accelerate the need to go public, according to Ripcord Inc. founder Alex Fielding.“Would I say that there was any risk from any investment that we took from a Chinese fund? No. I think they’re all great investors. It’s good money from good people and banks that are well known. This isn’t terrorist money,” he said. “Is there risk to Ripcord as a company for taking it? There is now.”Ripcord, which uses robots and artificial intelligence to scan and classify paper documents, previously got financing from sources including the venture capital arms of Chinese search leader Baidu Inc. and Beijing-based conglomerate Legend Holdings Corp. Now Fielding is looking for new investment to help the Hayward, California-based startup expand overseas. The trade war stands in his way.Instead of expanding to China and raising more money there, Ripcord’s first international move is to enter Japan via a new branch in Tokyo that will work with a large bank. And Fielding is eyeing cash from U.S. strategic investors with the ability to commit more in further rounds as needed. That should give Ripcord more time to grow before turning to public markets, he said.Decisions like this are part of the reason Chinese investment in U.S. startups is falling. There have been 25 rounds with at least one China-based investor so far in the third quarter, down from a peak of 67 in the second quarter of 2018, according to market tracker Preqin.Ripcord, whose clients include Coca-Cola Co., has carved out a niche by digitizing information on paper so it can be loaded into corporate data bases. Its 30,000-square-foot-factory space in the San Francisco Bay area houses giant machines that the startup builds itself. Ripcord has the equipment made domestically by U.S. companies. That’s more expensive than outsourcing to Asia, but more prudent in this new environment, he said.The problem with a greater association with China is that the U.S. administration could decide to classify a Ripcord investor or partner as a security risk, which could be fatal for the startup, according to Fielding.“There’s a lot of companies that are probably in that boat, weighing: Do we take a local investment that’ll cost us more than a foreign investment when there’s risk that comes with that?” he said. “It was never a part of the narrative, and now it is.”For Ripcord, Fielding believes the extra maneuvering will be worth it because he sees such a big opportunity. About 49 trillion sheets of paper are printed annually. Ripcord has scanned hundreds of millions of sheets this year and will pass 1 billion sheets next year.To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Alistair Barr, Mark MilianFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Baidu Expansion Spree: $200 Million Neusoft Investment
    Market Realist

    Baidu Expansion Spree: $200 Million Neusoft Investment

    Multinational Chinese tech company Baidu has taken proactive steps to counter market uncertainty. It has plans to expand into areas of emerging technology.

  • Things Look Precarious for IQ Stock Post Q2 Earnings Disappointment
    InvestorPlace

    Things Look Precarious for IQ Stock Post Q2 Earnings Disappointment

    The challenges facing Chinese streaming video play iQiyi (NASDAQ:IQ) are myriad, and they've pressured IQ stock.Source: natmac stock / Shutterstock.com iQiyi stock has rallied so far this year, gaining 21%, but it's faded of late. Those gains, meanwhile, are coming after the stock hit an all-time low in late 2018.In recent months, at a cheaper price, I've come around to the bull case for IQ stock. In June, I called it the best play for those still bullish on China long-term.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThat's not to say the risks weren't, and aren't, significant. The Chinese economy continues to struggle amid a trade war with the U.S. Competition is intense, most notably from Tencent (OTCMKTS:TCEHY) and Alibaba (NYSE:BABA) unit Youku Toudo. iQiyi still is burning cash as it grows. Majority owner Baidu (NASDAQ:BIDU) is struggling, leading to the possibility of further sales of iQiyi stock.iQiyi's second-quarter report last month seems to highlight, if not increase, those risks. Investors largely have shrugged off the report, as IQ stock trades above where it did before the release. * 10 Stocks to Sell in Market-Cursed September But on this site, Luke Lango argued the report wasn't enough, and I'm inclined to agree. iQiyi still has an intriguing long-term case, but the near-term risk to IQ stock seems to be rising. Growth Slows, but IQ Stock Holds UpFrom a headline standpoint, iQiyi's second-quarter earnings report looks close to disastrous. Revenue growth decelerated dramatically. In Q1, revenue in yuan increased by 43% year-over-year. Growth in Q2 was just 15%.To be fair, there's a key culprit outside of the company's control: the Chinese macroeconomic environment. Advertising revenue declined 16% year-over-year in the second quarter, after a ~flat performance on the same basis in Q1. CEO Tim Gong Yu noted that "a lot of advertisers constrained their advertising budgets," on the Q2 conference call.In the subscription business, iQiyi generated new members toward the end of the quarter thanks to new content. And so membership revenue increased just 38% despite a 50% increase in the quarter-end subscriber count.Both factors are understandable, and indeed the 15% increase was in line with Street estimates. That said, Q3 guidance for revenue growth of just 4-10% suggests a further decline in the top-line growth rate.At the same time, iQiyi's spending isn't going anywhere. Operating loss widened by over 40% year-over-year. Content costs increased by just 7%, but selling and marketing expenses both rose sharply.Perhaps surprisingly, investors saw the quarter as reasonably in line: iQiyi stock only fell 1% the following day. It may be that 50% subscriber growth and decent performance in a tough environment was good enough, particularly given the fact that IQ stock had slid heading into the release. The Risks to iQiyi StockThat said, there are some concerns in the report upon closer inspection. One, in particular, is the fact that subscriber growth came in toward the end of the quarter. As management noted, that boost came as the content was released, which itself is a bit of a concern.The worry is that iQiyi essentially can't stop spending on content, or else subscriber growth slows or stops. It's an echo of the worry facing Netflix (NASDAQ:NFLX), to which iQiyi is often, and somewhat incorrectly, compared.The bullish case for both stocks is that building out a content library with upfront spending will result in enormous cash flow down the line, as that content is monetized. If, however, consumers come to expect more and better content in perpetuity, the hamster wheel never stops spinning. The correlation between content spend and subscriber growth thus is somewhat discomfiting, even at this early stage in iQiyi's growth.The other concern is on the advertising front. Macro weakness is a headwind, to be sure. But iQiyi management also noted an increase in the supply of online advertising inventory, which is pressuring pricing.That's a big risk. Price reductions come off the operating profit line at almost 100%. And the combination of higher inventory and macro concerns suggests ad revenues can be pressured into 2020 at least. Investors hoping for near-term profitability may have to wait longer than they expected. Dented, but Not BrokenTo be sure, Q2 earnings don't break the case for IQ stock. Investors in U.S. markets seem reasonably content with the idea that Chinese companies may struggle for a few quarters. The long-term opportunity, however, still remains.That's true for iQiyi as well. That said, it's hard not to see near- to mid-term risk rising after the second-quarter report. This still is a company with a market cap of over $13 billion, no profitability, and decelerating growth. That's usually a recipe for disaster.Add in the underlying concerns in both the subscription and advertising businesses, and IQ stock at least seems like a candidate for a decline when broad markets stumble. And if Q3 shows further revenue deceleration and wider losses, it may not take a market sell-off for iQiyi stock to start falling again.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post Things Look Precarious for IQ Stock Post Q2 Earnings Disappointment appeared first on InvestorPlace.

  • Baidu Inc. (BIDU) Outpaces Stock Market Gains: What You Should Know
    Zacks

    Baidu Inc. (BIDU) Outpaces Stock Market Gains: What You Should Know

    Baidu Inc. (BIDU) closed at $111.79 in the latest trading session, marking a +1.26% move from the prior day.

  • Baidu (BIDU) Invests $200M in Neusoft, Expands AI Presence
    Zacks

    Baidu (BIDU) Invests $200M in Neusoft, Expands AI Presence

    Baidu (BIDU) plans to invest 1.44 billion yuan ($200 million) in an AI company, Neusoft Holdings. The move is likely to further expand Baidu's presence in this space.

  • Texas AG: Consumers ultimately pay a price for ‘free’ Google searches
    Yahoo Finance

    Texas AG: Consumers ultimately pay a price for ‘free’ Google searches

    Texas attorney general Ken Paxton said consumers ultimately pay the price for Google's market dominance.

  • With Obvious Catalysts Priced In, What’s Next for Nvidia Stock?
    InvestorPlace

    With Obvious Catalysts Priced In, What’s Next for Nvidia Stock?

    The stock market is a "what have you done for me lately" business. I believe that's the situation that Nvidia Corporation (NASDAQ:NVDA) finds itself in. In an economy that is becoming increasingly immersed in artificial intelligence (AI), the question that investors might be wondering is "what's next?"Source: michelmond / Shutterstock.com Since 2016, NVDA has started to look like a high-flying growth stock and not a fairly predictable semiconductor company. But the market has a way of finding equilibrium and that may very well be the case for Nvidia stock. The Market Already Recognizes NVDA as a Leader in AIBack in May of 2017, many people including InvestorPlace contributor Larry Ramer were saying that Nvidia stock, which was up about 200% for the year at the time, was already pricing in the benefit of the AI revolution. Yet in 2018, NVDA stock exploded to over $286 per share in October of 2018.InvestorPlace - Stock Market News, Stock Advice & Trading TipsThe reason for this, in large part, was the need for Nvidia's chips to power the mining of cryptocurrency. But cryptocurrency is a volatile business. And when the crypto bubble burst, the air went out of Nvidia stock as well. Shares plummeted over 50% by January of this year. * 10 Stocks to Sell in Market-Cursed September Now they're climbing again. Nvidia stock has gained over 30% since the end of May to its current price of $182.52 per share. Some of that gain is due to its most recent earnings report. In August, NVDA reported a better-than-expected earnings per share, and a slight gain in revenue. China Remains a Big Story for NvidiaAnother reason for the explosive growth in NVDA stock in 2018 was demand from China. It's no secret that the U.S. and China are racing to show leadership in the AI space. In July 2017, Nvidia and Baidu (NASDAQ:BIDU) announced a partnership that would allow Baidu to use Nvidia's technology for cloud computing service, self-driving vehicles, and AI home assistants.But since the onset of the trade war with China, analysts are wondering if NVDA will lose access to this all-important market. And if they do, will there be avenues to replace it? NVDA Is Moving Deeper into the IoT SpaceThis summer, Nvidia announced that it is the first AI platform to train BERT (one of the most advanced AI language models) in less than an hour and complete AI interference in just over 2 milliseconds. Companies recognize the significance of this breakthrough as they use real-time conversational AI to engage more naturally with customers. This means that hundreds of developers worldwide will use NVDA's AI platform to advance their own language understanding research and create new services.This initiative alone will seed the company more deeply into the growing Internet of Things (IoT) space. If estimates are correct, IoT revenue will top $373 billion in 2020 and hardware, like the kind Nvidia provides, will account for 52% of those sales.This came after Nvidia's announced partnership in April of 2018 in which ARM will use Nvidia's open-source Deep Learning Accelerator (NVDLA) in its Project Trillium platform. Last month I wrote that this may not sound like a big revenue generator for NVDA in the short-term. However, it helps Nvidia create an ecosystem that will drive more revenue through its data centers. The Bottom Line on Nvidia StockPrior to 2016, Nvidia was a semiconductor stock doing the things that semiconductor stocks do. It didn't move too high or too low. It was predictable. Then AI came along and NVDA has become feted like a tech darling as investors rushed to get in on the "next new thing".I'm not down on Nvidia stock. The company is a legitimate leader in the technology that is fueling AI applications. But if the equity was looking overvalued at $140, it certainly seems to be overvalued at $180. That's especially so since the consensus price estimate is $189.Buy Nvidia for what it is - a semiconductor company. But don't pay a price for Nvidia stock based on its current valuation with the expectation that it has a high ceiling: at least not right away. The AI revolution is not going away, but not every application or every company will be successful. Nvidia is just one link in the chain. And their success is dependent on others being able to deliver on their promises.As of this writing, Chris Markoch did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Stocks to Sell in Market-Cursed September * 7 of the Worst IPO Stocks in 2019 * 7 Best Stocks That Crushed It This Earnings Season The post With Obvious Catalysts Priced In, Whata€™s Next for Nvidia Stock? appeared first on InvestorPlace.

  • Moody's

    Cerence LLC -- Moody's assigns B2 CFR to Cerence in connection with spin-off and new debt issuance; outlook positive

    Moody's Investors Service ("Moody's") assigned a B2 Corporate Family Rating (CFR) and B2-PD Probability of Default Rating (PDR) to Cerence LLC ("Cerence") in connection with the company's expected spin-off from, Nuance Communications, Inc. ("Nuance" Ba3, Stable), and Cerence's concurrent proposed debt financing. Cerence's proposed $425 million senior secured term loan B and $75 million revolving credit facility were assigned ratings of B2, in line with the CFR.

  • Jack Ma on his departure: ‘Alibaba is just one of my many dreams’
    Yahoo Finance

    Jack Ma on his departure: ‘Alibaba is just one of my many dreams’

    Jack Ma's farewell party from Alibaba isn't complete without the music lover putting on a show.

  • Ten Years After Spinning It Off, Sohu Wants Changyou Back
    Motley Fool

    Ten Years After Spinning It Off, Sohu Wants Changyou Back

    But merging two Chinese tech company underdogs won’t create a market leader.

  • The Baidu (NASDAQ:BIDU) Share Price Is Down 51% So Some Shareholders Are Wishing They Sold
    Simply Wall St.

    The Baidu (NASDAQ:BIDU) Share Price Is Down 51% So Some Shareholders Are Wishing They Sold

    Investing in stocks comes with the risk that the share price will fall. And there's no doubt that Baidu, Inc...

  • The Numbers Don’t Add Up for IQiyi Stock
    InvestorPlace

    The Numbers Don’t Add Up for IQiyi Stock

    iQiyi (NASDAQ:IQ) is China's leading streaming service. It's attracting investors because it is delivering viewers. In fact, over the next two years some analysts project iQiyi's user growth will climb 6.7% to 738 million. Average revenue per user is also expected to climb 8.3% to $17.60 per user.Source: Faizal Ramli / Shutterstock.com This number raises the question of practical growth versus numerical growth. However, in the short term, more users should provide a nice tailwind for IQ stock. But I'm not so sure that iQiyi has the right business model for long-term growth. iQiyi is like Netflix if Netflix Were Owned by AlphabetThe most important caveat when discussing iQiyi is that it is a subsidiary of Baidu (NASDAQ:BIDU), China's leading search engine. iQiyi is seen as a key source of revenue for Baidu (which still owns 58% of IQ) as it attempts to halt a steep skid in its own stock price. So whenever you talk about iQiyi making over 70% from advertising revenue you have to remember that it's Baidu that's generating that revenue.InvestorPlace - Stock Market News, Stock Advice & Trading TipsiQiyi on the other hand makes its revenue through sales of its subscription services and content marketing. Proponents of IQ stock will say that iQiyi currently has about one-half of the Chinese market. But even with only half the market, it still has more users than Netflix (NASDAQ:NFLX). Plus, by keeping subscription costs very low (approximately $3 in U.S. terms), it will have no problem capturing more of the Chinese market. Do Chinese Consumers Really Love Ads?There are U.S. companies (e.g. Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) and Facebook (NASDAQ:FB)) that rely on advertising revenue. But that business model is starting to come under attack. Consumers are more aware than ever that the advertising content they receive comes at the expense of their personal privacy. This conflict is being played out in the stocks as investors wrestle with what companies such as Facebook look like with falling advertising revenue. * 7 Stocks to Buy In a Flat Market I have to believe that iQiyi will be facing the same issues. The theory is that China is the leader in e-commerce so it stands to reason that Chinese consumers will be drawn to advertising like a moth to a flame. However, viewing habits in China don't seem to support this theory. A report by digital brand researcher L2 cited that the streaming habits of Chinese consumers revolve around live-streaming events that resemble the QVC network. One of the reasons why Chinese consumers are attracted to this format is because there is no hard sell. It's part infomercial, part reality TV and keeps them more engaged.This isn't to say that iQiyi doesn't have a large user base, but it does suggest that Chinese consumers are not going to pay more for content that includes advertising. They go elsewhere for that. iQiyi Can't Afford to Be NetflixNetflix subscribers pay between $10-$16 for a subscription. With that subscription, they get exactly what they want - - the potential for hours upon hours of uninterrupted viewing. But even though Netflix, which started out as a home delivery service for DVDs, has evolved its business model to incorporate original content, it is still facing two emerging threats. First, original content costs a lot to produce. Second, the two most popular shows on Netflix, "The Office" and "Friends," will no longer be available on the service after 2020.IQ by contrast can afford to keep the price of their subscription low because of Baidu. However, perhaps recognizing the need to give Chinese consumers more variety, iQiyi is still taking on the expense of producing original content. This creates a math problem.Netflix is struggling to remain profitable while charging between three and five times what iQiyi charges their customers. So where is the profit going to come from for iQiyi? Advertising will only take it so far. Eventually, no many how many viewers they deliver, advertisers will expect a return on their investment. But Chinese viewers are already skeptical of traditional advertising, so I'm not sure how that model works long term. The Bottom Line for IQ StockIt wouldn't surprise me if IQ stock rises in the short term as the company expands its user base. However, as much as IQ wants to position itself as the Chinese version of Netflix, investors will need to see a profit and consumers may want to see commercial-free viewing.That presents iQiyi with a trap that I just can't square with long-term success.As of this writing, Chris Markoch did not hold any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 3 Artificial Intelligence Stocks to Buy * 7 Industrial Stocks to Buy for a Strong U.S. Economy * 3 Beaten-Down Bank Stocks to Buy and Hold for the Long Term The post The Numbers Don't Add Up for IQiyi Stock appeared first on InvestorPlace.

  • Alibaba Buys NetEase Unit for $2 Billion
    Zacks

    Alibaba Buys NetEase Unit for $2 Billion

    Alibaba buys NetEase unit in a classic win-win deal.

  • Three Tech Stocks for Contrarian Investors
    Market Realist

    Three Tech Stocks for Contrarian Investors

    Tech stocks have been wealth creators for a few decades now. In this article, we analyze tech stocks that should be on the radar of contrarian investors.

  • Why Momo and iQIYI Had Very Different Fates in the First Half of 2019
    Motley Fool

    Why Momo and iQIYI Had Very Different Fates in the First Half of 2019

    These two Chinese entertainment companies have had a growing chasm between their stock prices this year.

  • 5 Futuristic Artificial Intelligence Stocks to Buy
    InvestorPlace

    5 Futuristic Artificial Intelligence Stocks to Buy

    [Editor's note: "5 Futuristic Artificial Intelligence Stocks to Buy" was previously published in July 2019. It has since been updated to include the most relevant information available.]Before we know it, AI will be part of our everyday lives. Market experts say artificial intelligence will lead the next wave of economic growth and productivity for at least the next couple of decades. But many AI stocks have earned a cautious outlook from the Street.We all know the up and downsides of stocks like Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Tesla Inc (NASDAQ:TSLA), but their challenges are separate from some other heavily AI-influenced stocks.InvestorPlace - Stock Market News, Stock Advice & Trading TipsTo find the best investing opportunities in AI right now, we looked for five stocks with a "strong buy" or "moderate buy" consensus rating from the Street's top analysts. These are analysts with the highest success rate and average return. By limiting the ratings to best-performing analysts, we cut out analysts with poor track records to find recommendations investors can trust. * Dorian's Impact on the Markets Stocks with "strong buy" ratings are also more likely to have significant upside potential from the current share price. Salesforce (CRM)When cloud computing giant Salesforce.com (NYSE:CRM) launched its Einstein Analytics platform back in 2017, everyone was buzzing. "We have more customer data than ever before and we need AI to turn data into something actionable for the business user," says CRM exec Arijit Sengupta.Salesforce wants a slice of the fast-growing AI market. A report by IDC and commissioned by CRM found that AI technologies will create more than 800,000 new jobs and add $1.1 trillion to global GDP by 2021.CRM also has a very strong outlook from the Street. Microsoft (MSFT)Microsoft (NASDAQ:MSFT) acquired Canadian AI company Maluuba as its primary entrance into the AI fray. Maluuba teaches machines to think and ask questions through deep learning. You may have heard of Maluuba when it made the impossible possible and used AI to beat the notoriously difficult Ms. Pac-Man arcade video game.Microsoft CEO Satya Nadella says he wants to "democratize AI" and bring the technology to more industries such as healthcare, education and manufacturing. * Dorian's Impact on the Markets After taking a bit of a beating at the end of 2018, Microsoft has surpassed its previous highs. Alphabet (GOOGL)Alphabet Inc (NASDAQ:GOOGL) has made the most AI purchases out of any tech firm, calculated research firm Quid, which shows that GOOG has made 20 AI acquisitions, including predictive analytics platform Kaggle in Q1 2017 alone.Google CEO Sundar Pichai long has spoken about Google's "AI first" future. At Google's developer conference, he showed the Google Lens (a camera that can recognize what it sees) and AutoML. AutoML uses neural networks to build better neural networks, essentially creating an AI that can create itself.Google is rife with "buy" ratings and very few sell or hold ratings, and it has meaningful upside. Baidu (BIDU)Chinese internet company Baidu Inc (ADR) (NASDAQ:BIDU), the "Google of China", has been investing heavily in AI. It thinks artificial intelligence can give it an edge over local rivals Tencent Holdings Ltd. (OTCMKTS:TCEHY) and Alibaba Group Holdings Ltd (NYSE:BABA).Baidu spent $2.9 billion on R&D in just 2.5 years, with most of this going to AI. The money has funded a 1,700-member research team and four separate research labs. Crucially, Baidu has an AI advantage because of the huge data it gains from its 665 million monthly search engine users. * Dorian's Impact on the Markets BIDU is a moderate buy with the trade war dragging on, but it still has impressive upside potential. Delphi Automotive (DLPH)U.K.-based auto tech company Delphi Automotive (NYSE:DLPH) is on the rise after a tumultuous few months.Delphi dropped its powertrain business to focus on self-driving cars and electric vehicles last year, which appears to finally be paying off. In partnership with BMW, Intel Corporation (NASDAQ:INTC) and Mobileye NV, Delphi plans to launch self-driving cars by 2021.Which stocks have a strong buy rating in the sector that interests you?TipRanks tracks and ranks over 4,500 analysts from eight different market sectors. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post 5 Futuristic Artificial Intelligence Stocks to Buy appeared first on InvestorPlace.

  • Alibaba Buys NetEase Online Mall for $2 Billion in Rare Pact
    Bloomberg

    Alibaba Buys NetEase Online Mall for $2 Billion in Rare Pact

    (Bloomberg) -- Alibaba Group Holding Ltd. bought NetEase Inc.’s Kaola e-commerce platform for about $2 billion and invested in its music streaming service, forging a rare partnership between two of China’s largest internet giants.The deal hands Alibaba the biggest Chinese online marketplace for foreign brands after its own Tmall Import and Export. Kaola will now operate independently but under new Chief Executive Officer Alvin Liu, a Tmall veteran. Separately, Alibaba and billionaire co-founder Jack Ma’s Yunfeng Capital will invest $700 million in NetEase Cloud Music. NetEase remains the controlling shareholder of its music app.Alibaba and NetEase -- both based in the prosperous eastern city of Hangzhou -- have long fought social media titan Tencent Holdings Ltd. across several fronts but the landscape is shifting. The emergence of Tencent-backed rivals like Pinduoduo Inc. is testing Alibaba’s dominance of retail. NetEase has long been a distant runner-up to Tencent in gaming and now also music streaming, while Alibaba has its own music app Xiami. The sale of the low-margin Kaola platform now allows NetEase to focus on its bread-and-butter gaming business.“NetEase can further optimize its costs while Alibaba strengthens its leadership in cross-border e-commerce,” Thomas Chong and Ken Chong, analysts at Jefferies, wrote Friday. “On the other hand, we believe NetEase Cloud Music can benefit from potential synergies with the Alibaba ecosystem.”Read more: Tencent Music Dives as Watchdog Probes Its Record-Label TiesThe Kaola deal creates a dominant bazaar for consumers seeking foreign labels and goods. Alibaba and Kaola, which is loss-making on an operational level, controlled almost 60% of all transactions on China-based platforms for foreign brands in the second quarter, according to research firm Analysys.It also deepens a seeming alliance. NetEase founder William Ding and Alibaba CEO Daniel Zhang exchanged good-natured banter during a long TV interview aired in China just last month. Asked about their rivalry, Ding joked: “Many of our employees might be husbands and wives.”What Bloomberg Intelligence saysAlibaba’s $2 billion acquisition of Kaola, NetEase’s cross-border e-commerce platform, will make it the go-to channel for Chinese consumers seeking high-quality foreign products.\-- Vey-Sern Ling and Tiffany Tam, analysts-- Click here for the researchThe investment will prove welcome to NetEase, which like Alibaba has grappled with rising content costs.NetEase Music most recently raised $600 million in November when Baidu Inc., General Atlantic and Boyu Capital participated in a fundraising round. The latest capital injection comes after China’s antitrust authority launched a probe into its much larger rival, Tencent Music Entertainment Group, over its licensing practices. Under government pressure, Tencent Music and NetEase Music last year agreed to relicense more than 99% of their music catalogs to each other.“What really matters is the 1% exclusive content,” said Shawn Yang, a Shenzhen-based analyst with Blue Lotus. “Now that NetEase has new funding that can be used to buy copyrights, it will definitely be a threat to TME.”(Updates with analysts’ comments in the fourth paragraph)To contact the reporter on this story: Zheping Huang in Hong Kong at zhuang245@bloomberg.netTo contact the editors responsible for this story: Edwin Chan at echan273@bloomberg.net, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Motley Fool

    China's Stock Market: US Trade War Breakdown and Top Stocks to Watch

    Even amidst all the trade-war confusion, there are solid Chinese stocks that deserve a spot on investors' watch lists.

  • Why Now May Be a Great Time to Buy Baidu
    Motley Fool

    Why Now May Be a Great Time to Buy Baidu

    Revenue has been sluggish for the Chinese tech giant recently, but that doesn't mean the company has run out of opportunities to grow.

  • At This Price, IQ Stock Is a Better, Bolder Bet Than Netflix
    InvestorPlace

    At This Price, IQ Stock Is a Better, Bolder Bet Than Netflix

    iQiyi (NASDAQ:IQ) looks as if it might be the next great streaming buy. As more and more content consumers choose to "cut the (cable TV) cord," streaming has become the delivery method of choice for series, movies, and other programming. The streaming king in America at the moment may be Netflix (NASDAQ:NFLX), but enterprising investors might wish to look abroad and consider a position in IQ stock instead.Source: Jarretera / Shutterstock.com Originally spun off of Baidu (NASDAQ:BIDU) and still 58% owned by that company, iQiyi might look like a funny name in the U.S. but it's a dominant streaming brand name in China. (Incidentally, I've come to learn from InvestorPlace's own Dana Blankenhorn that the correct pronunciation is "ee-KWEE-kwi," in case you're curious.)In any case, I consider an allocation in iQiyi stock to be a similar bet on Netflix, but with perhaps more growth potential if you don't mind some downside risk.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Buy IQ Stock for the Subscriber GrowthTo fill in the missing pieces of the iQiyi puzzle, the company's second-quarter reported earnings results are as good a place to start as any. A modest but appreciable 15% increase in year-over-year revenues -- $7.11 billion in Q2 of this year, compared to $6.17 billion in the same quarter of last year (originally reported yuan figures have been converted to U.S. dollars) -- shows that iQiyi's business model is creating slow but steady growth and value for longer-term investors. * 7 Deeply Discounted Energy Stocks to Buy More important than that is subscriber growth, the bread and butter of any streaming service. The second quarter of 2019 proved to be a milestone for iQiyi as the company's subscriber count exceeded 100 million during that time - 100.5 million to be more precise. This was a remarkable 50% increase compared to the same quarter a year prior.Not only that, but iQiyi's revenues from membership services showed an impressive year-over-year increase of 39% during that same time frame; converted from yuan to U.S. dollars, the reported Q2 2019 figure was $497 million. Yu Gong, iQiyi's founder and CEO, remains confident that the upward trajectory in subscriber and revenue growth can continue going forward:We are pleased to report another solid quarter of performance highlighted by our total subscribing members surpassing 100 million… We remain committed to our strategy of enhancing production capabilities of high quality original content and advancing our AI technology innovation in content production, distribution and monetization. Trade-War HeadwindsI believe that the Q2 figures, along with the performance of IQ stock, would have been even better had it not been for the persistent Sino-U.S. trade war, which has taken a toll on both countries' economies. Xiaodong Wang, the CFO of iQiyi, indirectly alluded to this:We achieved continued revenue growth in the second quarter despite some recent challenges facing our industry… We believe our long-term growth landscape remains intact, and we will continue to invest in our original content and technology which serve as the dual engines to drive our future growth.Given the top-line growth which I detailed earlier, I can't help but concur with the CFO's assessment of iQiyi's future.The fact that IQ stock shares are trading at 50% of the price peak seen in June of 2018 is viewed as a drawback to some investors, but I see it as a prime buying opportunity for China's analog to Netflix. I think it's no coincidence that iQiyi stock started to decline right when the trade war started to ramp up. The same tariff conflict that battered the IQ stock price can also precipitate a swift comeback when the trade war is eventually resolved.Besides, I appreciate iQiyi's business model: the company keeps the membership fees super-low at $3 per month (or the yuan equivalent of that amount), while also collecting revenues from the sale of advertisements. This is an added source of revenue that Netflix doesn't collect - and while American Netflix subscribers probably don't like ads too much, I see iQiyi's multiple revenue streams as yet another reason to buy and hold IQ stock. The Takeaway on IQ StockThe fact is, even if you're an American investor, you don't have to buy a pricey stock like NFLX to take a stake in the global streaming phenomenon. Indeed, there's plenty of growth to be had in IQ stock, a cheaper alternative to Netflix shares with some risk, I'll grant, but strong upside potential as well.As of this writing, David Moadel did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 7 Deeply Discounted Energy Stocks to Buy * 7 Stocks to Buy In a Flat Market * 10 Stocks to Buy to Ride China's Emerging Wealth The post At This Price, IQ Stock Is a Better, Bolder Bet Than Netflix appeared first on InvestorPlace.

  • Baidu Inc. (BIDU) Stock Sinks As Market Gains: What You Should Know
    Zacks

    Baidu Inc. (BIDU) Stock Sinks As Market Gains: What You Should Know

    Baidu Inc. (BIDU) closed the most recent trading day at $102.54, moving -0.02% from the previous trading session.

  • Better Buy: Baidu vs. NetEase
    Motley Fool

    Better Buy: Baidu vs. NetEase

    China's leading search engine and one of the country's original online gaming companies are cheap. Let's see which one is cheaper based on their near-term prospects.

  • Motley Fool

    Where Are Wearables and Smart Speakers in 2019?

    The demand picture’s shifted in the last few years, and some unexpected players are rising to the top.