Baidu (BIDU) Offering Possible 78.57% Return Over the Next 3 Calendar Days

Baidu's most recent trend suggests a bullish bias. One trading opportunity on Baidu is a Bull Put Spread using a strike $144.00 short put and a strike $139.00 long put offers a potential 78.57% return on risk over the next 3 calendar days. Maximum profit would be generated if the Bull Put Spread were to expire worthless, which would occur if the stock were above $144.00 by expiration. The full premium credit of $2.20 would be kept by the premium seller. The risk of $2.80 would be incurred if the stock dropped below the $139.00 long put strike price.

The 5-day moving average is moving up which suggests that the short-term momentum for Baidu is bullish and the probability of a rise in share price is higher if the stock starts trending.

The 20-day moving average is moving up which suggests that the medium-term momentum for Baidu is bullish.

The RSI indicator is at 75.32 level which suggests that the stock is neither overbought nor oversold at this time.

To learn how to execute such a strategy while accounting for risk and reward in the context of smart portfolio management, and see how to trade live with a successful professional trader, view more here

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LATEST NEWS for Baidu

Baidu Completes Double Bottom Reversal
Sun, 15 Nov 2020 12:56:34 +0000
The Chinese search engine giant reports Q3 2020 earnings after Monday’s U.S. closing bell.

China Gets Ready to Rein in Baidu, Alibaba, and Tencent
Sat, 14 Nov 2020 13:00:00 +0000
Newly drafted antitrust rules could make it tougher for the BAT triumvirate to continue expanding their ecosystems.

Mergers Have Bounced Back. But Will Biden See an M&A Boom?
Sat, 14 Nov 2020 01:00:00 +0000
Predicting the size of the merger market is never easy. After a year of political turmoil, pandemic, and recession, expectations for next year in the merger business under a new administration are for a return to normalcy, which isn’t bad.

China Clampdown on Big Tech Puts More Billionaires on Notice
Wed, 11 Nov 2020 01:41:53 +0000
(Bloomberg) — Xi Jinping’s Communist Party stepped up efforts to rein in some of China’s most powerful companies, jolting investors and dealing a blow to the country’s richest entrepreneurs.Beijing on Tuesday unveiled regulations to root out monopolistic practices in the internet industry, seeking to curtail the growing influence of corporations like Alibaba Group Holding Ltd. and Tencent Holdings Ltd. The rules, which sent both stocks tumbling over two frenetic days and sparked a wider selloff in Chinese equities, landed about a week after new restrictions on the finance sector triggered the shock suspension of Ant Group Co.’s $35 billion initial public offering.While Xi’s government has been steadily tightening its grip on the world’s second-largest economy, it has until recently taken a relatively hands off approach toward businesses that dominate China’s burgeoning internet, e-commerce and digital finance industries. Authorities are concerned the companies have become too powerful, according to Ma Chen, a Beijing-based partner at Han Kun Law Offices.“This is a watershed moment,” said Ma, who specializes in antitrust.Alibaba, Ant and Tencent alone commanded a combined market capitalization of nearly $2 trillion before last week, easily surpassing state-owned behemoths like Bank of China Ltd. as the country’s most valuable companies. Wednesday’s selloff sent Alibaba shares down another 7% to its lowest since August in Hong Kong, while analysts have estimated that Ant’s $280 billion valuation could be cut in half due to stricter regulations. That’s after Alibaba’s 5% decline Tuesday. Both companies were co-founded by billionaire Jack Ma, China’s most celebrated businessman.Tencent, the gaming to payments giant whose rise turned co-founder Pony Ma into China’s richest man, fell as much as 6% Wednesday in Hong Kong after sinking 4.4% the previous day. Meituan, the food-delivery startup that has since expanded into hotel bookings and movie tickets, dived a further 6% before paring losses. It had tumbled 10.5% Tuesday. The company declined to comment while representatives from Alibaba and Tencent didn’t immediately respond to queries.China’s antitrust watchdog is seeking feedback on a raft of regulations that establish a framework for curbing anti-competitive behavior such as colluding on sharing sensitive consumer data, alliances that squeeze out smaller rivals and subsidizing services at below cost to eliminate competitors. They may also require companies that operate a so-called Variable Interest Entity — a vehicle through which virtually every major Chinese internet company attracts foreign investment and lists overseas — to apply for specific operating approval.More on the Variable Interest Entity, how China IPOs tap investorsThe latest proposal follows heightened scrutiny of technology companies worldwide, as regulators investigate the extent to which internet giants from Facebook Inc. to Alphabet Inc.’s Google can leverage their dominance. Consumers in China — home to some of the world’s largest corporations from e-commerce giant Alibaba to WeChat-operator Tencent — have in recent years protested against the gradual erosion of their privacy via technology from facial recognition to big data analysis.Read more: China Targets Internet Giants in Antitrust Law OverhaulBeijing is increasingly seeking to diminish the influence that a handful of its tech corporations wield over vast swathes of the economy. It investigated Tencent’s music arm’s exclusive agreements with publishers last year and, most recently, modified regulations to rein in risk at fast-growing micro-lending entities such as Ant Group. The latter step derailed Ant’s planned IPO last week, before it was to complete what would have been the world’s largest such offering on record.“There seems to be a broader China government sentiment that internet platforms are becoming too powerful,” said Hoi Tak Leung, a Hong Kong-based lawyer specializing in Chinese internet companies at Ashurst LLP. “This would be consistent with worldwide developments as well.”The new rules were proposed in accordance with and build on China’s Anti-Monopoly Law, which in January included broad language governing internet companies for the first time. They restrict targeting specific customers through their online behavior, a common practice adopted by players both at home and abroad. Under the regulations unveiled by the State Administration of Market Regulation, violators may be forced to divest assets, intellectual property or technologies, open up their infrastructure and adjust their algorithms. The watchdog will seek public feedback on the regulations till Nov. 30.Representatives from Alibaba, Tencent, TikTok-owner ByteDance Ltd. and 24 other tech giants attended a meeting with regulators from the antitrust and cyberspace authorities earlier this month to discuss issues ranging from unfair competition to counterfeiting. “Internet platforms are not outside the reach of antitrust laws, nor are they the breeding ground for unfair competition,” the regulators said in a subsequent statement.Further measures to tighten oversight of the tech companies may be in the offing. Regulators plan to release new rules governing internet transactions by June 2021, according to a State Council statement released Tuesday.The government is now trying to update its laws for the internet era, to adapt to an industry where market dominance isn’t always easily quantifiable. In the past, China used revenue or market share to determine whether a company held a monopoly. But those precepts may not apply to internet firms, which sometimes control valuable information that haven’t yet been monetized.JD.com, for instance, has accused bigger rival Alibaba of unfairly locking in exclusive agreements with merchants, which Alibaba has denied. Regulators have investigated the legality of Cheng Wei’s Didi Chuxing acquiring Uber Technologies Inc.’s Chinese business. And Tencent’s WeChat dominates many aspects of daily Chinese life from payments to gaming, though ByteDance, co-founded by Zhang Yiming, has in recent years begun to eat into its advertising business through video service Douyin and news platform Toutiao.Alibaba and Tencent now dominate e-commerce and gaming, but are also key backers of leaders in adjacent businesses such as Wang Xing’s Meituan and car-hailing leader Didi. They’ve together invested billions of dollars in hundreds of up-and-coming mobile and internet companies, gaining kingmaker status in the world’s largest smartphone and internet arena by users. Companies like ByteDance and Tencent-rival NetEase Corp., controlled by William Ding, that have risen to prominence without backing from either of the pair are viewed as rare exceptions. In other areas, Robin Li’s Baidu Inc. dominates online search.Hong Kong Tech Stock Gauge Slides on China Antitrust Rules“The Party is faced with the conflicting desires to empower domestic tech companies to be internationally competitive, while keeping their market activities firmly under control at home,” said Kendra Schaefer, head of digital research at the Trivium China consultancy in Beijing. “The horizontal spread of Chinese big tech makes anti-monopoly regulation that much more urgent for Chinese regulators.”Han Kun Law’s Ma said the specific regulation pertaining to VIEs requiring approval should be of concern to much of the industry as well. The model has never been formally endorsed by Beijing but has been used by tech titans such as Alibaba to list their shares overseas. Under the structure, Chinese corporations transfer profits to an offshore entity with shares that foreign investors can then own. Pioneered by Sina Corp. and its investment bankers during a 2000 initial public offering, the VIE framework rests on shaky legal ground and foreign investors have been nervous about their bets unwinding overnight.“It will not only have a huge impact on Alibaba but also all the companies that use a platform business model and a VIE structure,” Ma said.(Updates with Wednesday’s selloff from the second paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

Beijing Just Tore Up China's Giant Internet Playbook
Wed, 11 Nov 2020 01:35:00 +0000
(Bloomberg Opinion) — All the things that allowed China’s internet innovators to become big, powerful and hugely profitable are under threat. The implications are chilling for established players.Draft rules detailed by China’s antitrust watchdog Tuesday are aimed at rooting out monopolistic practices among internet companies, Bloomberg News reported. That could be invigorating for potential challengers to industry leaders such as Alibaba Group Holding Ltd., Tencent Holdings Ltd., Meituan and Baidu Inc.Take Alibaba. The Hangzhou-based company has a side gig selling cloud computing services, which has posted chronic operating losses as the company chases customers and market share. The huge profits of Alibaba’s legacy e-commerce business have helped to buffer these losses, which widened 23% last year to $1 billion. The new rules could conceivably put an end to that kind of subsidization, forcing the company to raise prices and churn a profit, or even divest the business altogether.Delivery and booking service giant Meituan could also be in regulators’ sights. Within a year of its Hong Kong listing, Meituan managed to turn profitable thanks to its deep knowledge of consumer habits, which it could then leverage to sell ads to vendors who use its platform. That, too, could be in jeopardy under the antitrust rules, which would restrict the use of such data to target specific customers.Games and social-networking company Tencent, e-retailer JD.Com Inc. and search provider Baidu  may also face scrutiny, given the size and dominance they have in their respective niches.Beijing’s goal may be to clear the decks for fresh companies to enter.A challenger in the cloud business would struggle to compete if Alibaba, with $60 billion in cash and equivalents, can just keep undercutting it until the new entrant runs out of money. In a market without competition rules, predatory pricing is just regular business.With data being almost as valuable as cash, companies like Meituan and Tencent have a distinct advantage because they know more about the market and consumers than any newbie that wants to hang out its shingle and start offering services. Throttling that data flow could help even the playing field. It’s possible this intervention will add fresh energy to an internet market that has passed its growth heyday, exacerbated by a slowing of the Chinese domestic consumer sector and the pandemic-hit global economy. It may also let Beijing shepherd in a new crop of companies that better align with its economic and political goals, which include tighter control over information and money flows.The nixing last week of Ant Group Co.’s much-anticipated listing is evidence that not even the world’s biggest IPO is immune to regulatory change. In Ant’s case, the concern was over the fintech giant’s risk management and market dominance.Hints as to Beijing’s goal can be seen in plans to require variable interest entities to get operating approval. For more than a decade, VIEs have existed in a legal gray area that lets Chinese companies skirt restriction on foreign ownership. A clampdown may accelerate moves to delist from U.S. markets and return home, a trend spurred by President Donald Trump’s aggressive policies toward China. Doing so would allow regulators to keep a tighter grip on the money that flows into and out of these giants, and redirect funds to projects that better align with Beijing’s China-first policies.Regulation may well achieve the goal of limiting monopolies and opening up the market. But companies are quick to adapt, with every chance that new behemoths will appear. Witness the considerable efforts to crack down on Microsoft Corp. in the late 1990s, aimed at separating its internet browser from its operating system. In the subsequent decade, Alphabet Inc.’s Google and Facebook Inc. rose to dominate new domains. The world is now engaged in efforts to limit the market power of the new titans. Meanwhile, Microsoft still holds a commanding share of the OS market.Beijing may be successful in stymieing China’s current Big Tech cohort. Just don’t expect the era of internet leviathans to end. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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