Baidu's $2B Bond Move On Trip.com Stake Improves Retail Sentiment Amid Broader Chinese Tech Surge

Shares of Baidu, Inc. were in the spotlight on Friday after the Chinese tech major priced $2 billion in exchangeable bonds due 2032, linked to ordinary shares of Trip.com (TCOM) listed in Hong Kong.

Under certain conditions, Baidu can deliver Trip.com shares held by the company instead of cash or a mix of both. However, the bonds cannot be exchanged for American depositary shares of Trip.com.

Baidu intends to use the proceeds from the offering to repay debt, cover interest payments and general corporate purposes.

The Chinese search-engine giant is reportedly one of Trip.com's major shareholders.

The move comes amid a Chinese tech stock rally fueled by AI startup DeepSeek posing a threat to established U.S. rivals and the government's pledge to support the sector via additional stimulus.

Retail sentiment on Baidu stock on Stocktwits improved to ‘neutral’  from ‘bearish’ a week ago.  While message volume continued to be in the ‘low’ zone.

BIDU sentiment meter and message volume on March 10

According to research firm Bernstein, the deal will result in Baidu selling 48% of its current stake, which will be reduced to less than 4%, The Fly reported. The deal will also allow Baidu to receive proceeds from the sale of Trip.com without having to sell the stock in the open market, added the report.

Shares of Trip.com have risen about 10% in the past week.

Retail sentiment on Trip on Stocktwits improved to ‘extremely bullish’  from ‘bearish’ a week ago, with one bullish commenter noting that a 52-week high was near.

Trip sentiment meter and message volume on March 10

A trader had observed earlier that Trip.com stock is "just about a dollar away from its post-earnings drop" and looks set to reclaim that level.

Baidu stock is up 12% year-to-date, while Trip.com’s U.S-listed stock is down nearly 4%.

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