Tag Archives: Digital Sky Technologies

Alibaba Buyout: Finally Something for Investors 阿里巴巴筹资为机构投资者提供良机

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E-commerce leader Alibaba’s long-awaited announcement that it will buy back 20 percent of its shares from Yahoo (Nasdaq: YHOO) is finally offering investors something they haven’t seen in a long time: A new chance to buy into a Chinese Internet firm that actually earns money. Unfortunately for most investors, they won’t have a chance to buy into the company anytime soon, as Alibaba is likely to sell most of its recently repurchased shares to big institutional buyers willing to fork over a minimum of tens of millions of dollars and more likely hundreds of millions of dollars for a piece of China’s top e-commerce company. But smaller institutional and retail investors could also get their opportunity in the not too distant future, with word that the buyout deal announced earlier this week provides strong incentives for Alibaba to make its own IPO by the end of next year, a deal that could help to return some excitement to the struggling market for Chinese Internet stocks. Just a day after announcing its landmark buyback, Alibaba is reportedly already in talks with a number of institutional buyers who want to purchase some of the stake, including Singapore’s massive sovereign wealth fund Temasek, which wants to invest some $500 million, according to a Chinese media report. (Chinese article) That kind of investment wouldn’t come as a surprise at all, as Temasek has always been particularly bullish on China, with a special interest in companies that are leaders in their spaces. Earlier this month Temasek purchased a major stake in ICBC (HKEx: 1398; Shanghai: 601398) for $2.5 billion, picking up shares that were being sold off by Goldman Sachs (NYSE: GS). (previous post) I would expect to see other major financial investors, including other sovereign wealth funds, insurance companies and pension funds, buying into Alibaba in these latest talks, with a probable minimum investment of $100 million each. On the other hand, don’t look for any new strategic investors like Yahoo to sign on in this new round of stake sales. That’s because Alibaba’s founder Jack Ma seems determined to run his own show and, based on his unhappy experience with Yahoo, doesn’t want strategic investors looking over his shoulder and offering suggestions. But while strategic investors may be out, Alibaba is clearly aggressively courting the financial investors, seeking to quickly sign them up to help it pay off the billions in debt it is assuming to buy back the Yahoo stake for a total of $7.1 billion. The company already counts such big names as Japan’s Softbank and Russia’s Digital Sky Technologies among its current investors, and will no doubt be looking for more high profile names to raise its own profile. While anyone with less than $100 million is unlikely to get a stake in this latest fund raising round, there should still be plenty of opportunity to buy into Alibaba for smaller investors if it moves ahead with an expected plan for an initial public offering by the end of next year. Such an offering could come as a big boost for Chinese Internet stocks in general, which were once investor darlings but have become pariahs over the last year due to a series of accounting scandals. Investors have also grown increasingly intolerant of Chinese web companies that are losing money, which describes the big majority of firms to list over the last 2 years. An Alibaba IPO would address both of those issues, providing a company with reliable accounting due to its relatively long history and major foreign investors, as well as a company that is highly profitable. From a broader market perspective, an Alibaba IPO will be good for the market by offering a quality company with strong long term prospects both at home and abroad. But on the downside, that offering won’t come for at least a year, meaning the broader market for China Internet companies could remain in the doldrums for quite some time unless another exciting offering comes along.

Bottom line: Alibaba’s new capital raising will offer good opportunities for institutional buyers, and an IPO as soon as next year could return some excitement to the weak market for China Internet stocks.

Related postings 相关文章:

◙ Yahoo, Alibaba in Slow-Motion Divorce 雅虎和阿里巴巴踏上漫漫离婚路

◙ Alibaba-Yahoo Buyout: Back to Square One 阿里巴巴股权回购重回起点

◙ Alibaba’s Yahoo Buyback: Deal Finally Near? 阿里巴巴回购雅虎所持股权可能为期不远

360Buy Looks Around to Real Estate 京东商城试水房地产

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I have no idea what’s happening behind the scenes at 360Buy, but a growing number of mixed signals from this online retailing giant seem to portray a company sinking into turmoil, including the latest news that it is now getting into the real estate services business. (English article) According to the latest reports, 360Buy, which also goes by the name of Jingdong Mall, has teamed up with a Beijing real estate company called Tianheng as a potential prelude to entering the online home shopping business. While homes are also a consumer retail product, selling such major items online is far different from 360Buy’s core retail business of selling everyday products like electronics, clothing and books. What’s more, 360Buy has no experience in this kind of transaction, which is far more complex than buying a tube of toothpaste over the Internet. This new initiative is just the latest sign of a company that is losing focus as big new investors who pumped more than $1 billion into it last year seem to be looking for any and every new business opportunity they can think of. The company entered the highly competitive online book selling business in January (previous post), and in February it made a strange move into the online travel business, putting it into direct competition with well established players like Ctrip (Nasdaq: CTRP) and eLong (Nasdaq: LONG). (previous post) The steady stream of new initiatives comes not long after the investor group that included Russia’s Digital Sky Technologies made the $1 billion-plus investment about a year ago, leading me to believe this group is at least partly behind these moves as its members anxiously look to justify their huge investment. Amid the stream of new business initiatives, increasing signs have emerged of a behind-the-scenes battle over the timing of an initial public offering by the company. 360Buy’s founder Liu Qiangdong has repeatedly said that no such offering is in the works for at least the next 2 years. But at the same time, another steady stream of reports that appear to be coming from the banking world keep emerging that say the company has hired an investment bank as it prepares to make a multibillion-dollar IPO. (previous post) The increasingly mixed signals look like a worrisome trend for potential investors, indicating this company is rapidly losing direction and focus as a number of major stakeholders all try to take control. Presumably the company still has lots of cash and doesn’t urgently need to raise money through an IPO after its big fund raising last year. Still, if it does go ahead with a public offering, I would caution investors to be very wary of buying into this company until it can regain some of its focus and concentrate on becoming profitable.

Bottom line: 360Buy’s move into real estate services is the latest mixed signal from the company, which appears to be losing focus as stakeholders and managers battle for control.

Related postings 相关文章:

◙ Message to 360Buy: Make Up Your Mind! 京东商城IPO“暗战”

◙ 360Buy Losing Focus With Travel Plan 京东商城涉足在线旅行服务业 偏离核心业务

◙ 360Buy Heats Up E-Books, People’s Daily Goes to Market 京东商城高调进军电子书,人民网开启上市进程

E-Commerce: 360Buy Awaits IPO Window, Amazon Expands 京东IPO融资心切 亚马逊物流扩张加剧竞争

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There are a few interesting items out there on the e-commerce space, where local giant 360Buy continues to ready itself for a New York IPO while global giant Amazon (Nasdaq: AMZN) continues its China expansion but is also learning just how price sensitive local consumers can be. Let’s look first at 360Buy, which also goes by the name Jingdong Mall. The company made headlines last year when it received a $1 billion investment from a group that included Russia’s Digital Sky Technologies (DST), which estimated at that time that 360Buy could be worth $10 billion. (previous post) Since then, the company has been locked in a series of cutthroat price wars in the overheated e-commerce space, most notably with Dangdang (NYSE: DANG), causing it to burn through a big portion of its cash and announce last fall it was preparing for a New York IPO, even though it was still losing big money. (previous post) Now Chinese media are reporting the company has been quietly bringing in a new group of professional top-tier managers as it still readies for the IPO despite several delays. (Chinese article) I’m sure that 360Buy desperately needs cash from the IPO, and that it is just waiting for 1 or 2 Chinese companies to make successful offerings before filing its own prospectus. That said, we could see this offering take place as early as March or April if market sentiment improves. Meantime, media are reporting that Amazon is continuing its aggressive China expansion by opening a new logistics center to serve the Tianjin-Beijing area, following its opening of another massive center near Shanghai last fall. (English article) But I was also amused to read another report that the company is adding a delivery fee to all orders under 29 yuan, in what clearly looks like some frustration at the small size of orders from many Chinese consumers. (Chinese article) My advice to Amazon would be to be careful, as it risks raising the ire of Chinese consumers with this kind of move, and everyone knows that upsets Chinese Internet users are quite effective at running negative backlash campaigns.

Bottom line: Cash-starved 360Buy could launch its IPO as early as March, while Amazon’s rapid expansion will add even more competition to the market.

Related postings 相关文章:

◙ 360Buy IPO: Let the Delays Begin 京东商城放缓IPO进程

◙ Amazon Name Shift Signals China Ramp-Up 亚马逊改名背后折射中国野心

◙ More Stumbles for Saab Rescue, 360Buy IPO 搭救萨博和京东商城IPO两计划注定命运多舛

More Stumbles for Saab Rescue, 360Buy IPO 搭救萨博和京东商城IPO两计划注定命运多舛

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Not surprisingly, two questionable deals that I previously predicted would run into trouble are showing new signs of problems, one in the automobile space and the other in e-commerce. The former involves a dubious plan by 2 obscure Chinese companies to help rescue Swedish automaker Saab, while the latter involves an equally questionable plan by money-losing e-commerce site 360Buy, also known as Jingdong Mall, to raise up to $5 billion in a US IPO. First Saab, whose plan to get a 245 million euro rescue loan from Chinese firms Youngman Lotus and Pangda Automobile (Shanghai: 601258) looked destined to fail from the beginning, as China’s state planner was unlikely to approve such a loan. (previous post) Now foreign media are saying the Chinese pair have instead offered to buy Saab outright for a much smaller cash infusion, an offer that Saab’s owner has rejected. (English article) It’s hard to say exactly what is happening here, but my guess is that the Chinese pair modified their offer — knowing full well it would be rejected — after realizing or being told their original proposal would never get Chinese government approval. Regardless of the reason, this development probably means the end of the road for near-bankrupt Saab, whose hopes on China for a rescue never really had a serious chance of success. As to 360Buy, Chinese media are reporting more delays in the money-losing company’s planned mega-IPO, which made headlines when it suddenly leaked the news last month. (Chinese article) Just a week after word of the IPO plan first emerged, the company, whose investors include Russia’s Digital Sky Technologies, already leaked once that it was delaying the move. (previous post) This new report cites an insider saying the latest delay is due to weak market sentiment, and an IPO won’t happen until the first half of 2012 at earliest. Even that sounds extremely optimistic to me, and I wouldn’t expect to see this company raise any money from Wall Street until 2013 or later.

Bottom line: Plans for a China rescue for Saab and a mega-IPO from 360Buy are, as expected, turning out to be overly optimistic, with neither likely to happen anytime soon.

Related postings 相关文章:

◙ Message to Saab: Don’t Count on China 萨博不应指望中国注资

◙ 360Buy IPO: Let the Delays Begin 京东商城放缓IPO进程

◙ 360Buy $5 Bln IPO Plan Looks Like Desperation 京东商城50亿美元上市计划凸显绝望

 

More Internet Froth in Alibaba Valuation, Dangdang Price War 阿里巴巴估值奇高凸显网络泡沫

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The latest signs of froth in China’s bulging Internet bubble are popping up in several places this week, with new investors in e-commerce leader Alibaba Group boasting a ridiculously high valuation for the company, while the latest price war by Dangdang (NYSE: DANG) underscores the overheated competition. And in perhaps the most revealing of the new developments, even state-owned dinosaur CCTV is jumping on the e-commerce bandwagon, with the launch of its CNTV Mall. (English article) Let’s begin with Alibaba, which has received new investment from a group of blue-chip investors including Singapore’s Temasek, private equity firm Silver Lake Partners and Russia’s Digital Sky Technologies (DST), which are boasting their investment values the company at as much as $32 billion. (English article) This sounds ridiculous for a company that analysts were estimating was worth around $10 billion just months ago, and is reminiscent of DST’s estimate earlier this year shortly after it and others invested $1.5 billion in e-commerce site 360Buy that that company was worth up to $10 billion. (previous post) I wouldn’t be surprised if DST was the one giving the $32 billion figure for Alibaba, and would advise DST’s chief Yuri Milner to take a course in remedial finance before throwing out more such overinflated numbers in the future. In terms of Dangdang, the company is reportedly pressuring consumer electronics companies that sell on its site to lower their prices below those of comparable products on 360Buy, in a campaign that a Dangdang insider says has been named “operation decapitation”. (English article) The name of the campaign itself reflects the hyper competition that has appeared in China’s e-commerce space following the infusion of billions of dollars in new investment over the past year. But the biggest sign of a bubble in my view is the arrival of China Central Television, better known as CCTV, to the market. You know that when a slow-moving dinosaur like CCTV finally joins the game, the party is almost over.

Bottom line: A sky-high new valuation for Alibaba Group and the latest cut-throat campaign from Dangdang are the latest signs of a looming burst for China’s Internet bubble.

本周种种迹象表明，中国互联网泡沫正在成形。阿里巴巴市值被投资者吹捧到高得离谱，当当网(DANG.N)近期打响价格战凸显行业竞争白热化。最能说明问题的莫过于CCTV也进军电子商务领域，推出中国网络电视台商城（CNTV Mall）。首先，来谈谈阿里巴巴。该集团近期获得多家蓝筹投资机构投资，包括新加坡淡马锡控股、私募公司Silver Lake Partners及俄罗斯风投公司数字天空科技（DST）。这些机构称，他们对阿里巴巴的投资，促使该公司市值高达320亿美元。这听起来十分荒谬，因为仅在数月前，分析师估算的阿里巴巴市值仅为100亿美元左右。这不禁让人想起今年早些时候，DST与沃尔玛和百度向京东商城投资15亿美元后不久，就对京东商城估值100亿美元。如果是DST提供阿里巴巴市值320亿美元的数据，我一点也不会感到惊讶，我会建议，DST执行长米尔纳（Yuri Milner）以後夸大这类数据前，应先学会补齐财务知识。有报导称，当当网正向其消费电子产品供应商施压，要求其售价应低于京东商城同类产品，当当网内部人士透露，此举被命名为“斩首行动”。这一名字本身就反映了中国电子商务行业竞争白热化的现状。该领域过去一年来获得了数十亿计美元的新注资。但我认为，中国互联网泡沫的最大迹象是CCTV进军该市场。要知道，像CCTV这样行动缓慢的庞然大物加入时，游戏就基本结束了。

一句话：对阿里巴巴集团估值过高，当当网启动“斩首行动”，这些都是中国互联网泡沫破裂的最新迹象。

Related postings 相关文章:

◙ Muddy Waters, Taobao Mall Wake Up to China E-commerce Hype

◙ 360Buy IPO: Let the Delays Begin 京东商城放缓IPO进程

◙ Wal-Mart Finds Bargain in China’s Internet Bubble

360Buy IPO: Let the Delays Begin 京东商城放缓IPO进程

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Just a week after leaking out word that it was accelerating plans for an IPO to raise up to $5 billion, leading online merchant 360Buy is waking up to the reality that perhaps nobody wants to buy into its shaky story, with Chinese media reporting the company has decided to slow down the ambitious offering. (Chinese article) Does this come as a surprise to me or anyone else who’s been watching the rapidly chilling market for Chinese IPOs in the US? Any regular readers will know the answer to this question is a definite “no”, and I wouldn’t be at all surprised to see this IPO shelved indefinitely until 360Buy either runs out of cash or market sentiment improves significantly, which in all likelihood won’t happen until late next year. The latest reports, citing people in the investment banking community, cleverly point out that 360Buy wasn’t even planning an IPO until the second quarter of next year anyway, after those same sources got the market buzzing last week by saying the selection of underwriters was underway, implying the blockbuster offering could come as soon as the end of this year. (previous post) Now those investment banking sources are saying that 360Buy is further delaying the process due to “less than perfect” financials, an obvious reference to the fact that the company has yet to turn a profit and previously predicted it wouldn’t even break even until 2012. With the current rampant competition in China’s e-commerce market, I wouldn’t be surprised if 360Buy, which also goes by the name Jingdong Mall and whose investors include Russian Facebook backer Digital Sky Technologies, has to delay its break-even forecast by another year, meaning it won’t be able to show any meaningful profits until 2014 at the earliest. If that’s the case, I wouldn’t be surprised to see this offering delayed until 2013 or even later and for far less than $5 billion, assuming the company is still in business at that point after China’s looming Internet bubble bursts.

Bottom line: 360Buy’s clumsy attempt to test the market for a blockbuster IPO has met with little or no interest, forcing it to delay the deal to to 2013 or later.

仅在一周前，京东商城透露称将加速赴美上市融资50亿美元的计划，但或许是意识到没人买账的现实，据中国媒体报导称，京东商城已决定放缓IPO进程。对于我和其他关注中国企业赴美上市热潮迅速降温的人来说，感到惊讶吗？一直关注我的专栏的读者都知道，答案绝对是否定的。除非京东商城资金链断裂或市场环境明显改善（在明年下半年前都不太可能发生），否则京东商城无限期搁置IPO计划，我一定都不会感到惊讶。近期报导援引投行人士的说法巧妙指出，京东商城甚至不打算在明年第二季度前进行IPO。上述消息人士上周称，京东商城正在选择承销商，暗示其最早今年底将进行IPO，此话引发市场骚动。这些投行消息人士现在却说，京东商城因财务不完善，将进一步推迟IPO时间，明显是指京东商城尚未盈利的事实，先前有人预计，甚至到2012年，京东商城可能都无法实现收支平衡。鉴于中国电子商务市场竞争激烈的现状，如果京东商城将盈利时间点再推迟一年，即最早2014年才有望实现大幅盈利，我不会对此感到惊讶。如果确实如此，我认为，假如中国互联网泡沫破裂後，京东商城还在运营的话，该公司IPO将推迟到2013年或之後进行，融资规模也将远远小于50亿美元，

一句话：京东商城以大规模IPO计划，笨拙试探市场，但感兴趣者寥寥无几，迫使其推迟IPO计划至2013年或之後。

Related postings 相关文章:

◙ Wal-Mart Finds Bargain in China’s Internet Bubble

◙ 360Buy $5 Bln IPO Plan Looks Like Desperation 京东商城50亿美元上市计划凸显绝望

◙ 360Buy Cuts Off Alipay As China Internet Froth Builds 京东停用支付宝印证中国互联网泡沫