Bernstein says Baidu (BIDU) announced the issuance of $2B in exchangeable bonds to facilitate the disposal of a large portion of its current stake in Trip.com (TCOM). At this price, Baidu is selling 48% of its current stake resulting in an end stake less than 4%, the analyst tells investors in a research note. The firm says the structure allows Baidu to receive proceeds from the sale of Trip.com shares without having to dispose the shares in the open market. Bernstein sees “clues here” that makes it wonder whether Baidu management is starting to take its stock price more seriously. It keeps a Market Perform rating on Baidu with a $108 price target.
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