Could the ownership structure of Baidu, Inc. (NASDAQ: BIDU) tell us anything useful?

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If you want to know who really controls Baidu, Inc. (NASDAQ: BIDU), then you will have to look at the makeup of its share ledger. Insiders often own a large portion of younger and smaller companies, while larger companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if it’s just a little. As Nassim Nicholas Taleb said, “Don’t tell me what you think, tell me what you have in your wallet.

Baidu has a market cap of $ 55 billion, so it’s too big to go unnoticed. We expect institutions and retail investors to own a portion of the company. Our analysis of company ownership, below, shows that institutional investors bought the company. Let’s take a closer look at what different types of shareholders can tell us about Baidu.

See our latest review for Baidu

NasdaqGS: Breakdown of BIDU property November 8, 2021

What does institutional ownership tell us about Baidu?

Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.

Baidu already has institutions on the share register. Indeed, they hold a respectable stake in the company. This may indicate that the company has a certain degree of credibility in the investment community. However, it’s best to beware of relying on the so-called validation that comes with institutional investors. They too are sometimes wrong. If several institutions change their mind about a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out Baidu’s earnings history below. Of course, the future is what really matters.

profit and revenue growth
NasdaqGS: BIDU profit and revenue growth November 8, 2021

We note that the hedge funds do not have a significant investment in Baidu. Looking at our data, we can see that the largest shareholder is CEO Yanhong Li with 20% of the shares outstanding. In comparison, the second and third shareholders hold around 4.3% and 2.9% of the capital.

A closer look at our ownership data shows that the top 25 shareholders collectively own less than half of the ledger, suggesting a large group of small holders where no shareholder has a majority.

While it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. There are a lot of analysts covering the stock, so you can look at expected growth quite easily.

Baidu insider property

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company is accountable to the board of directors and the board must represent the interests of the shareholders. Notably, sometimes senior executives themselves sit on the board of directors.

Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Our information suggests that insiders hold a significant stake in Baidu, Inc. Its market capitalization is only US $ 55 billion and insiders hold US $ 11 billion in shares in their name. It is quite important. Most would say it shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if these insiders have bought or sold.

General public property

The general public owns 31% of Baidu’s capital. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.

Next steps:

While it is worth considering the different groups that own a business, there are other factors that are even more important. Concrete example: we have spotted 3 warning signs for Baidu you need to be aware of this, and 2 of them make us uncomfortable.

If you are like me, you might want to ask yourself if this business will grow or shrink. Fortunately, you can check out this free report showing analysts’ forecasts for its future.

NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.

Do you have any feedback on this item? Are you worried about the content? Get in touch with us directly. You can also send an email to the editorial team (at) simplywallst.com.


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