Bottom line: Alibaba’s decision to sell one of its early US e-commerce sites just a year after the launch looks smart and decisive for new ventures that aren’t performing well, while its new China-based dining services site will face stiff competition.
Alibaba tries dining services with Koubei
Acquisitive e-commerce leader Alibaba (NYSE: BABA) is throwing up a rare white flag of surrender in the US, selling off its 11 Main site just a year after launching the e-commerce platform. That surrender looks relatively minor, as Alibaba never really gave the site much time to develop. But the quick decision to call it quits reflects the challenges Alibaba will face as it tries to show investors that it can be competitive outside its home China market, which will be critical to its future growth.
Meantime, Alibaba was in another separate headline that looks much more typical for the company, announcing a new mega tie-up worth nearly $1 billion that will take it into the dining services category. That initiative looks squarely aimed at Dianping, often called the Yelp (NYSE: YELP) of China, and Dianping’s major backer Tencent (HKEx: 700). Read Full Post…
Bottom line: Alibaba’s new fund-raising activities are relatively small but provide insight about its future direction, hinting at a major pushes into the gadget and financial services spaces.
Alibaba, Foxconn invest in Pepper
A couple of new fund-raising headlines involving e-commerce giant Alibaba (NYSE: BABA) show company founder Jack Ma engaged at one of the things he does best, namely making deals and forging new partnerships. Neither deal is particularly big in terms of dollar investment, but both provide some insight on the kinds of partners and tie-ups that Ma is pursuing for both the New York-listed Alibaba and its separate but affiliated Ant Financial unit. Read Full Post…
The following press releases and media reports about Chinese companies were carried on June 19. To view a full article or story, click on the link next to the headline.
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Alibaba’s (NYSE: BABA) Ant Financial Valued at $45 Bln After New Funding: Source (English article)
Huawei to Make Nexus Smartphones for Google (Nasdaq: GOOG) – Employee (Chinese article)
Bottom line: Alibaba’s technical glitch at Alipay, the launch of its new bank and use of its Taobao platform to auction of bad loans reflect its growing clout in financial services, as it attempts to build up its Ant Financial unit for a future IPO.
Technical glitch interrupts Alipay
E-commerce leader Alibaba (NYSE: BABA) is in a trio of finance-related headlines, spotlighting its growing bet on financial services that could be a huge growth area as Beijing opens the sector to private investment. One headline has seen Alibaba get official permission from its home province to open a bank, after it became one of the first 3 entities to receive private banking licenses under a pilot program by Beijing.
The second headline has seen the company’s popular Alipay electronic payments service experience technical problems that cut off access for 2 hours earlier this week, prompting it to quickly say that no accounts were compromised. The final news bit comes in a larger story about China’s growing bad asset crisis, which will see the nation’s top bad asset management company use Alibaba’s Taobao marketplace to auction off some of those assets. Read Full Post…
Bottom line: The accelerating pace of deals by Alibaba and its founder Jack Ma could be cause for concern, potentially overwhelming the company and Ma and creating headaches as they work to integrate so many new tie-ups.
Alibaba in new deal frenzy
It’s no secret that e-commerce giant Alibaba (NYSE: BABA) has been on a buying binge over the last 2 years, snapping up billions of dollars worth of smaller companies and forging new alliances as it tries to get into just about any Internet and media business it can find. But even a veteran industry watcher like myself is getting dizzy this week by the accelerating series of deals, which has seen the company and its charismatic founder Jack Ma in at least 4 headlines involving major new tie-ups in a wide variety of spaces.
One of those is coming in the logistics space, with Alibaba announcing its purchase of a stake in a major Chinese parcel delivery service. Another comes in entertainment, where the company is reportedly in talks for a smart TV joint venture with PC giant Lenovo (HKEx: 992). Yet another deal is in finance, with Jack Ma reportedly buying a stake in the Hong Kong-listed Reorient Group (HKEx: 376). And all of those deals are coming a day after media reported that Ma has become a new investor in the sports entertainment unit of online video services high-flyer LeTV (Shenzhen: 300104). Read Full Post…
Bottom line: Alibaba’s shares will continue to sag through the rest of the year on any news about the company, whether good or bad, as investors exit the stock to lock in big gains.
Alibaba shares continue downward trend
My earlier theory that shares of e-commerce giant Alibaba (NYSE: BABA) will continue to slump on any news, good or bad, is playing out as the shares re-approach a post-IPO low on a mixed series of headlines about the company. At this point the stock is simply on a downward track, as investors of all ilk who made big profits from the company’s meteoric rise sell their shares to lock in some gains. The pressure looks set to continue for the rest of the year, following the end of a post-IPO lock-up period last month that will allow Alibaba’s earliest investors to join the selling frenzy. (previous post) Read Full Post…
Bottom line: Alibaba’s 2 latest big investments in Snapchat and Snapdeal look like good bets for strong financial returns, but are unlikely to produce any major strategic benefit.
Alibaba in talks for Snapdeal stake
I was a bit confused on my first reading of the headlines today, after seeing articles saying e-commerce leader Alibaba (NYSE: BABA) was in talks to invest in 2 companies whose “snappy” names sounded quite similar. But a closer reading made it clear that these were 2 very different deals, one involving the popular US social networking service (SNS) Snapchat, and the other involving a popular Indian e-commerce site called Snapdeal.
Despite their big geographic and product differences, these 2 deals seem to represent a growing trend for Alibaba, which is no longer acquiring companies but instead only buying small strategic stakes. The strategy looks mostly advantageous to the investment targets. That’s because it’s helping to push up the valuations of names like Snapchat and Snapdeal to frothy levels, much the way Alibaba used similar investments to pump up its own valuation in the run-up to its IPO last year. Read Full Post…
Bottom line: Beijing needs to roll out new rules allowing limited foreign investment in sensitive areas or risk seeing private companies like Ant Financial suffer from slower growth and artificially low valuations.
foreign investment bans need new approach
Alibaba-affiliated (NYSE: BABA) Ant Financial has been on a financial roller coaster ride over the past month, as it tries to raise billions of dollar to fund its growth en route to an IPO that will offer Chinese investors one of their first plays into the private banking sector. Some reports have said the new funding could value Ant, whose largest asset is the Alipay electronic payments service, at up to $50 billion. But others have put the figure as low as $30 billion, reflecting the intense negotiations taking place. Read Full Post…
Bottom line: Ant Financial is likely to get a low valuation from its new private placement due to the exclusion of foreign investors, but could see the figure reach up to $70 billion by the time of its 2017 IPO if it can rapidly build up its new services.
SOEs squeeze Ant Financial’s valuation
Yet another report has come out about an ongoing private placement by Ant Financial, saying the financial services affiliate of e-commerce giant Alibaba (NYSE: BABA) is now planning a domestic IPO in 2017. That’s a little later than was indicated in previous reports, which were probably a little too optimistic about a company whose various businesses are mostly less than 2 years old.
But the more interesting element in this recent flurry of reports has been what valuation the new private placement will bring for Ant, which is financially separate from the New York-listed Alibaba. Some of the earlier reports indicated Ant could be valued at up to $50 billion, which admittedly looks quite optimistic for a firm at its stage of development. But now the latest reports are bringing the number down sharply, saying the new funding will value Ant at between $35 billion and $40 billion. Read Full Post…
The following press releases and media reports about Chinese companies were carried on February 12. To view a full article or story, click on the link next to the headline.
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Baidu (Nasdaq: BIDU) Announces Q4 And Fiscal Year 2014 Results (PRNewswire)
Ant Financial To Invest In Tebon Fund Management – Source (English article)
China’s Huawei Says Its Ready For Transparency (English article)
500.com Ltd (NYSE: WBAI) Reports Q4and Full Year 2014 Financial Results (English article)
Waldorf Astoria Sale Marks Tip Of Chinese Money Into US Hotels (English article)
Bottom line: Alibaba’s Ant Financial unit is likely to get a strong valuation with a planned new private placement, and will embark on a series of high-profile moves before making a multibilllion-dollar IPO next year.
Ant Financial eyes 2016 IPO
Alibaba’s (NYSE: BABA) high-profile spat with Beijing is finally starting to subside, paving the way for the company’s affiliated financial unit, Ant Financial, to move into the headlines with word of plans for a major new fund-raising. But anyone holding Alibaba stock shouldn’t get too excited about Ant, which is separate from the listed company and whose rapid rise will only benefit Alibaba founder Jack Ma.
At the same time, other media reports are saying that Internet giant Tencent (HKEx: 700) has formally cleansed its popular WeChat mobile messaging platform of a holiday red-envelope feature from Alipay, Ant Financial’s most valuable asset. That development isn’t a surprise, but it does spotlight one of several major challenges that Ant will face as it tries to carve out a profitable place for itself in China’s fast-evolving financial services sector. Read Full Post…
