According to rumors, Baidu Inc (ADR) (NASDAQ:BIDU) is looking to ramp up its takeout delivery business and is seeking a sum of between $300-$500 million to do so. Yesterday we reported on Alibaba’s $1.25 billion investment in the food delivery application Ele.me, mentioning that both Baidu Inc (ADR) (NASDAQ:BIDU) and Alibaba had interest in this rapidly growing business within the nation of China.
While we can not confirm these rumors, which were initially started within a non-public prospectus and then confirmed by numerous other sources, they certainly make a lot of sense. Baidu Inc (ADR) (NASDAQ:BIDU) is already providing takeout services in 109 cities and impressive growth is expected over the next few years. Eventually Baidu hopes to have over 100,000 delivery personnel including third-party delivery teams and individuals who help crowdsource such services. According to sources, 40% of the funding would be used for further platform development, and the remaining 60% for marketing, product development and the expanding of categories.
The stock is up 1.18% or $2.28 following the news, hitting $195.08 per share. About 839,135 shares traded hands. BIDU has declined 3.69% since May 26, 2015 and is downtrending. It has underperformed the S&P500 by 1.42%.
From a total of 12 analysts covering Baidu (NASDAQ:BIDU) stock, 5 rate it a “Buy”, 2 a “Sell”, and 5 a “Hold”. This means that 42% of the ratings are positive. The highest target price is $219 while the lowest target price is $150. The mean of all analyst targets is $191.43 which is -1.87% below today’s ($195.08) stock price. Baidu was the topic of 13 analyst reports since July 28, 2015 according to the firm StockzIntelligence Inc. TH Capital maintained shares on October 27 with a “Buy” rating. Summit Research downgraded BIDU stock in a recent report from September 30 to a “Hold” rating. Finally, Oppenheimer maintained the stock with a “Outperform” rating in a report they issued on an August 3.
Baidu, Inc. is a Chinese-language Internet search well-known provider (ISP). The company has a market cap of $67.01 billion. Baidu serves three types of online participants, which include users, clients and Baidu Union Members. It has 36.59 P/E ratio. The Firm offers a Chinese-language search platform on its Website, Baidu.com.