Baidu.com to Conduct 10:1 Forward Stock Split
I usually don’t buy stocks that cost a lot of money to get a share, those priced in hundreds of dollars, because I always like to own more shares. In late 2008 and early 2009, I bought probably a few thousands of shares of stocks when they were really, really cheap. However, among dozens of stocks I still own, there’s one exception. It’s Baidu.com (BIDU), one that I bought in February 2008 at $243.39 a share with TradeKing. The reason I bought the stock back then was its dominance of the internet search market in China. But since the stock was quite expensive (not in terms of P/E, but just the par value) and I don’t usually add any new money into my TradeKing account, I could only use what I had in the account to buy the stock, which was just enough to buy only one share of BIDU.
After more than two years, I still hold my only share of BIDU and the stock has skyrocketed, especially after the Google saga. Currently traded at $714.17, my return would be pretty nice if I sell it at today’s price. But I won’t, and now there are even more reasons to hold on to it.
I just received a notice from TradeKing about Baidu.com’s forward 10 for 1 stock split.
… after the close of business today, May 11, 2010, Baidu Inc (symbol BIDU) has announced a 10 for 1 forward split. The shares will trade at post-split prices beginning on the ex-date, tomorrow, May 12, 2010.
The Ex-distribution date is May 12, 2010. The payable date is May 11, 2010. And the record date is May 10, 2010. After the split, the stock price will be at $71.417 based on today’s closing price, which will be the price for tomorrow’s trading.
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Of those stocks I own and owned, a couple of them had conducted forward (China Life Insurance, which performed 2:1 split in 2006) and reverse (Nortel Network and AIG) stock split. While reverse split is usually a bad sign for a stock (NT has bankrupted and AIG is still struggling), forward split is usually a positive sign that the share price may go up (the split itself doesn’t create any real value except making the stock more “affordable” so more investors can buy shares). LFC is one such example and I hope BIDU will do the same
*Stock chart from MarketClub
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