CTRP - Baidu Sells Part of Its Ctrip Stake Ctrip Shares Lose Altitude
On Sept. 25, Ctrip.com International (NASDAQ: CTRP), China's leading online travel site, announced that Chinese search engine giant Baidu (NASDAQ: BIDU) planned to sell more than 31 million shares of Ctrip, or approximately 30% of its stake. Baidu, which is facing increasing competition in its core search business, has sought to diversify its investments in recent years by adding exposure to high-growth areas including artificial intelligence, autonomous driving, and smart speakers. In conjunction with the sale, on Sept. 27, Ctrip announced that the price on a proposed secondary offering would be $28 per American depository share.
The pricing on the secondary offering is significantly lower than the share price on the day of the Baidu sale announcement, and it will mean that Baidu may haul in quite a bit less than the initial $1 billion estimate. Ctrip shares began their initial descent following the Baidu disclosure, dropping 7.3% on Sept. 26 and tumbling 2.7% lower on Sept. 27 to close the week at $29.02.
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