Bottom line: New buyout bids for Dangdang and YY look opportunistic due to a recent sell-off in their shares, while Baixing.com could lead a new wave of domestic IPOs for Chinese Internet firms next year.
Dangdang gets buyout offer
A few lingering buyout offers for US-listed Chinese firms are trickling in after Thursday’s market rally in China, with e-commerce stalwart Dangdang (NYSE: DANG) and the newer social networking site YY (Nasdaq: YY) both announcing new privatization plans. These 2 announcements look quite opportunistic, as they come after a sell-off that has seen Dangdang and YY’s shares plunge over the last 2 weeks, but right after a major one-day China rally that spilled over into the US.
At the same time, online classifieds site Baixing.com is charting a path for the future, with word that it’s scrapping its variable interest entity (VIE) structure that is typically used for Chinese firms looking to list in New York. The company is reportedly making the move as it eyes a domestic Chinese listing instead, and also as it receives new funding from online search leader Baidu (Nasdaq: BIDU). Read Full Post…
Bottom line: The move by a Ctrip vice president to the role of CEO at eLong represents growing ties between the 2 companies, with the former likely to make a buyout offer for the latter within the next year.
Ctrip exec takes over at eLong
A new executive move between online travel leader Ctrip (Nasdaq: CTRP) and the smaller eLong (Nasdaq: LONG) shows the pair of former rivals are moving closer together, hinting at a potential outright merger in the not-too-distant future. Such a merger would have been major news just 5 years ago, when this pair of companies were the 2 clear leaders in China’s online travel sector.
Since then, however, eLong has sputtered under the ownership of US travel giant Expedia (Nasdaq: EXPE), which finally called it quits in May and sold its stake in the Chinese company. (previous post) Ctrip was quick to jump in and purchase 37 percent of eLong for $400 million, and has now moved even closer to its former rival with this new executive move. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 10. To view a full article or story, click on the link next to the headline.
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Alibaba (NYSE: BABA) Says Entertainment Unit Executive Taken Into Custody (English article)
Bottom line: Measures like LeTV’s share suspension and TCL’s share buyback will have minimal impact on their stock ultimate declines during the ongoing sell-off, and in the former case will only add to LeTV’s image as a market manipulator.
TCL buys back HK unit shares
It’s only Thursday, but already I’m looking forward to the weekend so I can take a break from writing daily about the pounding Chinese Internet and tech stocks are taking both at home and abroad. The number of Internet stocks getting pounded in China has just lost a major member, with word that online video superstar LeTV (Shenzhen: 300104) has joined a growing list of domestically traded companies that have been granted permission to suspend trading of their shares.
At the same time, a few of the other companies I write about are trying different tactics to support their shares, with electronics giant TCL (Shenzhen: 000100) expanding a share buyback program in one such move. Such buybacks usually total millions or perhaps tens of millions of dollars, and thus don’t seem very effective at a time when billions or even trillions of dollars worth of shares are being traded each day. But companies like TCL and LeTV are doing anything they can to try and support their tumbling stocks. Read Full Post…
Bottom line: Tencent’s new bond issue and Meituan’s $1 billion fund-raising plan are likely to mark the end of a wave of massive capital raising, as investors pause until China’s financial markets stabilize.
Meituan eyes new $1 bln fund-raising
China’s stock market turmoil may have brought an abrupt end to the booming IPO markets in Shanghai, Shenzhen and Hong Kong, but it hasn’t completely killed investor appetite for hot Internet companies. That’s the conclusion one could draw based on the latest series of mega-deal announcements, including a record $2 billion fund-raising by hired car services app operator Didi Kuaidi.
That fund-raising was formally announced the same day that reports emerged saying leading group buying site Meituan was aiming to raise another $1 billion, less than a year after it raised $700 million. Last but not least, social networking giant Tencent (HKEx: 700) is preparing to raise $100 million of its own, announcing it has just priced the latest tranche of bonds in a previously announced program to issue up to $10 billion in new debt. Read Full Post…
Bottom line: The iPhone’s appearance at the top of a Chinese investigative list of “data hogs” reflects the company’s obsession with control, but is unlikely to have a long-term negative effect on its local image.
iPhones gobble up data
Chinese media are once again feasting on leading smartphone maker Apple (Nasdaq: AAPL), which has has come out squarely on top of a “list of shame” that details how some of the best selling brands quietly steal data minutes from their unaware users. I’m not an iPhone user so I can’t attest to how the iPhones steal their data and how easy it is for users to stop the process. But my Google (Nasdaq: GOOG) Nexus phone is guilty of similar data hogging, and I had to pay a couple of large phone bills after I first bought it before I finally learned how to stop such automatic data consumption. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 9. To view a full article or story, click on the link next to the headline.
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Group Buying Site Meituan Prepares to Raise $1 Bln, Value Doubles in Half Year (Chinese article)
Alibaba (NYSE: BABA) Increases Investment in Singapore Post by $138 Mln (Chinese article)
Bottom line:Weibo’s new micro-showcasing e-commerce initiative looks well-conceived and could stand a good chance of success, but the company needs to move faster if it wants to compete over the longer term with more aggressive rivals.
Weibo & E-Commerce in China
Weibo launches new e-commerce initiative
After posting profits in the last 2 quarters, early social networking (SNS) leader Weibo (Nasdaq: WB) is aiming to bolster its longer-term residence in the black with a new drive into the lucrative but also highly competitive e-commerce space. The move looks a bit late, since many were hoping for quicker moves into e-commerce for Weibo 2 years ago after its landmark tie-up with sector gorilla Alibaba (NYSE: BABA).
But the cautious Weibo was never one to move too quickly, and in this case its newest initiative actually looks quite well conceived and customized to fit the usage patterns of its subscribers. That means it could have a good chance of success, perhaps helping to lift the company’s sagging stock. But that said, Weibo will still have to vie with similar services from a faster-moving Tencent (HKEx: 700), which is aggressively rolling out e-commerce services tied to its popular WeChat social networking (SNS) platform. Read Full Post…
Bottom line: The accelerating sell-off for US-listed China shares looks overblown and stocks are likely to rebound once the panic subsidies, but many previously announced buyout bids are still likely to collapse.
Ailing Chinese stocks infect US
The panic gripping China’s stock markets is spreading to US-listed Chinese shares, with even Internet blue chips like Baidu (Nasdaq: BIDU) and Alibaba (NYSE: BABA) getting sucked into the vortex of what looks like increasingly irrational selling. One media report is pointing out that tycoons like Tencent (HKEx: 700) and Alibaba founders Pony Ma and Jack Ma have seen their fortunes shrink by hundreds of millions or even more than a billion dollars in the latest trading day of the ongoing sell-off.
Another report cites China-based asset managers saying that a flood of privatization plans for China-listed US firms will still move forward despite the growing panic. Their optimism contrasts with growing skepticism among US investors who fear that many of the plans will collapse in tandem with China’s own crumbling stock markets. Anyone who agrees with those asset managers could make some big money right now, as the plummeting US stock prices mean many of these buyout candidates are now trading as much as 40 percent below their offer prices. Read Full Post…
My first hint that change was in the air for foreigners working in Shanghai came a couple of weeks ago on a visit to the foreign affairs office at the university where I teach. That was when the young man who handles my visas told me new rules coming out would allow me to apply for work visas good for 2 years or more – a radical change from the current policies that make getting anything longer than 1 year nearly impossible.
I didn’t share his enthusiasm, mostly because I’m quite skeptical of a Chinese system that makes many things possible in theory but quite difficult to achieve in reality. That small signal 2 weeks ago has rapidly evolved into a flood of new reports over the past week, all saying that Shanghai is becoming friendlier to foreigners who want to live and work here over the longer term. Read Full Post…
The following press releases and media reports about Chinese companies were carried on July 8. To view a full article or story, click on the link next to the headline.
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China Stock Slump Spreads as Alibaba (NYSE: BABA) to JD.com Whipsaw Investors (English article)
Weibo (Nasdaq: WB) Enters E-commerce Business (Chinese article)
Wanda Cinema (Shenzhen: 002739) Line H1 Revenues Up 41 Pct to 3.48 Bln Yuan (English article)
Uber’s China Rival Didi Kuaidi Said to Raise Funds From Ping An, Capital Int’l (English article)
Alipay In 130,000 Offline Stores, as Ant Financial Gets $45 Bln Valuation (Chinese article)
