On Wednesday, Baidu, a mid-stock listed company in the US, announced that the board of directors has approved a stock repurchase program. According to the plan, Baidu may repurchase up to US$1 billion worth of stocks in the next 12 months. The stock fell 3.1% on Wednesday.
Baidu said that the company will repurchase shares on the open market in accordance with market conditions and relevant regulations, in accordance with market prices, negotiated transactions, bulk transactions, and other means permitted by law. Baidu's board of directors will review the stock repurchase program on a regular basis and will authorize adjustments to its terms and sizes. Baidu plans to use cash to buy back shares.
Not long ago, Baidu stated in a document submitted to the Securities and Exchange Commission (SEC) that the company is evaluating the possibility of issuing and listing China Depositary Receipts (CDRs).
The document also stated that if Baidu chooses to issue CDR and obtain approval from relevant regulatory agencies, the incident will increase the total number of unissued shares, and any CDR provided will represent Baidu’s newly issued Class A common stock. Baidu stated that the timing of the submission of the CDR issuance application and the timing of its completion have not yet been determined and may be changed according to the market and other conditions.
One private equity person, who declined to be named, stated that Baidu’s generous repurchase of shares does not rule out the possibility of CDRs being issued in the future and that the repurchased shares can be used to issue CDRs.
During the two sessions this year, Li Yanhong, member of the National Committee of the Chinese People's Political Consultative Conference and Baidu's chairman and chief executive officer, expressed his stance on Baidu’s return to domestic listing. Li Yanhong said that he has always hoped that Baidu will be able to list in China as a whole because the major users and markets are all in China. If the major shareholders are also in China, it is the best situation.
Previously, it was reported that Baidu had selected Huatai Securities and CITIC Securities as sponsors for the issuance of CDRs, and would be the first Chinese stocks to return A shares from Nasdaq by issuing CDRs.
Originally, Xiaomi is expected to be the first company to issue CDR. However, on the day of the meeting, June 19th, Xiaomi suddenly announced that after repeated and careful research, the company decided to implement the listing plan in Hong Kong and China in a step-by-step manner, that is, after listing in Hong Kong, it would then choose to issue a CDR in the domestic market by issuing CDRs. . For this purpose, the company will apply to the China Securities Regulatory Commission to postpone the issuance of the IEC to review the company's CDR issuance application.
Late on the night of June 6, the Securities and Futures Commission formally issued nine documents including the "Administrative Measures on Depositary Receipts and Transaction Management (Trial)", effective immediately. This series of specifications makes specific arrangements for the issuance, listing, trading, and information disclosure systems of CDRs.
In this regard, the famous economist Song Qinghui pointed out that although the first single CDR has not yet been settled due to various factors, but from now on, there will be some unicorn companies in the future through the CDR to return A shares. For the market, on the one hand, it enriches the variety of transactions, and on the other hand, it also generates some financial pressure.