Tag Archives: IDG

FINANCE: IDG China Affiliate Roars with US Parent Buy

Bottom line: IDG Capital is likely to buy out the venture funding business of US affiliate IDG in the next year, setting the stage for the emergence of China’s first global venture capital firm.

IDG Capital roars with purchase of US parent

A sort of “mouse that roared” story is in the headlines today, with word that US tech finance and information giant International Data Group (IDG) has been bought out by its China affiliate. The China affiliate, IDG Capital, is actually teaming up with another major local partner, China Oceanwide Holdings, to purchase Boston-based IDG, whose assets include the well-respected market research firm International Data Corp (IDC), as well as PCWorld Magazine. Read Full Post…

SPORTS: Soccer Investing Reaches Fever Pitch with IDG Joint Venture

Bottom line: IDG’s new investment in a French soccer club and related joint venture providing soccer training and consulting in China looks like a savvy move to monetize growing demand for sports-related services.

IDG brings French soccer to China

Corporate China’s recent love affair with sports shows no signs of easing as 2016 winds down, with word of a new investment that will see IDG Capital form a joint venture to bring European-caliber soccer training to China. This particular deal was first reported back in August, but it seems a formal agreement has just been signed between IDG, one of the most successful foreign venture capital firms in China, and France’s Lyon Group. Read Full Post…

INTERNET: Inflate Gate Scandal Rocks SouFun

Bottom line: A scandal involving inflated sales reporting by workers at SouFun could cause the company to miss 2015 revenue guidance, and reflects pressures that China Internet firms are facing due to a slowing home economy.

SouFun uncovers inflated sales by employees

Just when it was beginning to claw its way back to favor with investors, real estate services website SouFun (NYSE: SFUN) is being rocked by a scandal after an internal probe revealed that some employees were inflating their new orders. The latest reports say SouFun has verified it fired some workers after uncovering the issue, though there’s no word on the magnitude of the problem.

More broadly speaking, this kind of report highlights the stresses that SouFun and rivals like E-House (NYSE: EJ) are facing due to a sharp slowdown in China’s overheated real estate market. That slowdown has caused prices to stagnate and transaction volumes to also tumble as buyers and sellers wait to see how the market will trend. That’s critical for companies like SouFun, since they depend on transactions for a big part of their business. Read Full Post…

BUYOUTS: SouFun, 7 Days Deals Spotlight Funding Alternatives

Bottom line: Recent moves by Baidu, SouFun and 7 Days reflect frustration by Chinese companies at lack of understanding by western stock buyers, but also spotlight the need for these companies to better educate investors about their stories.

Better investor education needed from Chinese companies

A trio of headlines last week highlighted the growing financial alternatives for high-growth Chinese companies that have lately felt unappreciated by global stock buyers. The news was quite varied, led by a threat from online search leader Baidu (Nasdaq: BIDU) to privatize its shares from New York, and a large new investment by 2 major private equity firms in online real estate services giant SouFun (NYSE: SFUN). Meantime, the formerly New York-listed 7 Days hotel chain was in headlines as it sold itself to Shanghai’s Jin Jiang International (HKEx: 2006; Shanghai: 600754).

Each of these stories is quite different, but all reflect a growing arsenal of tools that high-growth private Chinese companies have to boost their profiles and valuations as they become more skilled at playing in global financial markets. At a more fundamental level, each of these moves also represents a form of education for investors, which is critical to helping outsiders understand a group of companies from China’s vibrant but still largely unknown private sector. Read Full Post…

BUYOUTS: US Investors Punish Homebound China Orphans

Bottom line: As many as three-quarters of privatizing US-listed Chinese firms could see their buyout offers revoked, but many of their stocks may be oversold due to excessive investor worries during the latest trading session.

Orphan stocks look oversold after sell-off

What started as a wave of euphoria by US-listed Chinese firms looking to make some quick money by de-listing from New York and returning home is rapidly turning into chaos, with shares of many of those companies tumbling in the latest trading session. The fall is directly tied to China’s own rapidly crumbling stock markets, which was where most of these US orphans were hoping to re-list to get better valuations than they had in New York.

But now those plans have been thrown into doubt, and at least one analyst is joining my previous prediction that many of the record 27 companies to receive privatization offers this year could ultimately see those offers revoked. That means many of these companies may be forced to remain listed in the US, where they were punished by angry investors in the latest trading session. Read Full Post…

FUND RAISING: KongZhong Stumbles Into Buyout Queue, Legend Limps Up

Bottom line: The current fund-raising frenzy reflected in a recent round of buyouts for US-listed Chinese companies and large IPOs like the one for Legend Holdings is likely to quickly fizzle if China’s stock market sell-off continues.

KongZhong gets buyout offer

The China fund-raising machine has continued to rumble ahead despite the recent stock market sell-off in Shanghai, with yet another privatization offer coming for a New York-listed firm and a lethargic but respectable debut for newly listed Legend Holdings (HKEx: 3396). The former item saw shares of game operator KongZhong (Nasdaq: KZ) jump after receiving a buyout offer, even as most New York-listed Chinese shares slumped in line with the big sell-off in Shanghai. The latter item saw Legend shares finish down slightly in their Hong Kong trading debut, which doesn’t sound too exciting but was still far better than the 3.3 percent decline of the Shanghai benchmark index. Read Full Post…

FUND RAISING: Bubble Crests With Guotai IPO, Zhubajie Mega-Funding

Bottom line: A record IPO by Guotai Junan and massive private fund raising by a relatively unknown website reflect the overheated state of China’s capital markets, and could reflect a cresting of the current stock market rallies.

Guotai Junan eyes mega-IPO

With China’s stock market posting 2 consecutive days of large losses, everyone is starting to guess whether the current stock market rally may have finally crested and a period of correction begun. Two of the latest fund-raising headlines show just how frothy and ambitious activity has become, led by a plan for China’s biggest IPO in 5 years from securities brokerage Guotai Junan. The other headline comes in the venture funding space, where Zhubajie, a relatively unknown company in the hot crowdsourcing sector, has just landed an impressive 2.6 billion yuan ($420 million) in new funding. Read Full Post…

IPOs: Privatization Wave: A House of Cards?

Bottom line: An ongoing wave of buyout offers for US-listed Chinese firms is being funded by speculative money that will quickly evaporate when China’s stock market rally fizzles, causing some deals to collapse when that happens.

Gamblers fund privatization wave

It’s a new day, which means it’s time to take a look at the latest US-listed Chinese companies receiving privatization offers from opportunistic investors looking for bargains. Today it’s data center operator 21Vianet (Nasdaq: VNET) and beleaguered social networking site (SNS) operator Renren (NYSE: RENN) that are headed for the exit door.

I’ve been writing about this recent flurry of privatizations for the last few months, which is quickly turning into a flood as investors scramble to assemble deals to buy companies whose shares have languished on Wall Street. The idea is that these companies would be far more appreciated, and therefore get much higher valuations, from investors in their home China market, where an ongoing stock market rally has seen the main Shanghai index more than double over the last year. Read Full Post…

FUND RAISING: Shared, Chauffered Rides Attract Big Bucks

Bottom line: 3 new $100 million fundings reflect the recent popularity for Chinese tech and media start-ups among investors, pushing valuations up to unrealistic levels for these young companies that operate in mostly niche areas.

E Daijia wins big new funding

I can remember a time not long ago when $100 million seemed like a huge figure for start-ups raising new funds, and such amounts were quite infrequent. But in today’s overheated Chinese tech world, that figure is in 3 separate headlines this week, including 2 involving the hot area of location-based services (LBS). That pair of items has ride-sharing app Dida Pinche and mobile chauffeur app E Daijia each reaching the coveted $100 million mark in their third and fourth funding rounds, respectively. Meantime, the new sports unit of fast-rising video superstar LeTV (Shenzhen: 300104) has also just won its own $100 million in new funding, reportedly from one of China’s richest men. Read Full Post…

Game Operator Linekong Heads For HK IPO

Linekong breaks IPO silence with HK listing plan

The latest headlines about an upcoming IPO for online game operator Linekong made me realize it’s been quite a while since we last saw any news of offshore listing plans by Chinese Internet and tech firms. Such listings were coming nonstop earlier this year, and saw a wide range of names including the Twitter-like Weibo (Nasdaq: WB), e-commerce giant JD.com (Nasdaq: JD) and real estate services site Leju (NYSE: LEJU) all make IPOs in New York. But the Internet IPO pipeline has gone largely silent since early August, when mobile game operator iDreamSky (Nasdaq: DSKY) made its trading debut. Read Full Post…

Weibo: Lenovo, Xiaomi, Huawei Price War; Tributes For IDG Founder

The number 1,000 took on new significance in the blogosphere this past week, with tech titans Lenovo (HKEx: 992), Huawei and Xiaomi in a sudden new rush to chop prices for some of their newest products to under 1,000 yuan. The number translates to roughly $160, and is certainly not a bad price for the relatively high quality smartphones and tablet PCs that are suddenly being sold by the trio at that price and even less.

Meantime, tech executives were also paying tribute on their microblogs to Pat McGovern, the billionaire founder of the IDG media empire that was one of earliest venture capital investors to realize the potential of China’s Internet. McGovern, who died last Wednesday, leaves behind an empire that helped to fund some of China’s most recognizable Internet names, including sector leaders Tencent (HKEx: 700), Baidu (Nasdaq: BIDU), Ctrip (Nasdaq: CTRP) and SouFun (NYSE: SFUN), and many others. Read Full Post…