Bottom line: Shares of Alibaba and JD.com will remain under pressure for the next few months from opportunistic short selling, but should rebound late this year due to strong growth prospects for their core e-commerce business.
Short sellers pressure Alibaba, JD shares
Separate reports are spotlighting a recent short-selling spree targeting China’s 2 leading e-commerce companies, Alibaba (NYSE: BABA) and JD.com (Nasdaq: JD), wiping out billions of dollars in market value over the last few weeks. But the negative sentiment also raises the question of whether there’s something systemically wrong with these companies and China’s e-commerce market in general, or whether this is a short-term phenomenon created by people looking to make some quick profits. Read Full Post…
Bottom line: Jack Ma’s newly stated preference for an Ant Financial IPO in Hong Kong could touch off a new clash that would challenge the local securities regulator to grant an unusual listing exception or risk losing the blockbuster deal to New York.
Ant Financial eyes HK IPO
Just a couple of years after a high-profile tussle that saw e-commerce giant Alibaba (NYSE: BABA) ditch Hong Kong to make its record-breaking IPO in New York, talkative founder Jack Ma is gearing up for a similar game of chicken for an upcoming IPO by his company’s affiliated Ant Financial unit. That’s my initial assessment, following media reports that Ma has said his first preference would be a Hong Kong IPO for Ant Financial, China’s leading private financial services company whose prize asset is its Alipay electronic payments service. Read Full Post…
Bottom line: Alibaba’s new self-calculated valuation of $185 billion looks realistic and even possibly low, but the stock will remain under pressure until the intentions of big stakeholders SoftBank and Yahoo become clearer.
Alibaba estimates value at $185 bln
It’s not often that you get to see a major company put a value on itself, but that’s exactly what we’re getting as a result of new information coming from this week’s sale of nearly $8 billion worth of stock in Chinese e-commerce giant Alibaba (NYSE: BABA). I’ll end the suspense right away and say that Alibaba has valued itself at about $185 billion with the latest sale of a big block of its stock held by longtime Japanese backer SoftBank. While that number looks quite impressive, it’s also noteworthy because it values Alibaba quite a bit lower than arch-rival Tencent (HKEx: 700), as the pair jostle for the title of China’s biggest Internet company. Read Full Post…
Bottom line: A recent spree of European soccer purchases by Chinese buyers could auger a similar bid for an NBA team in the next 1-3 years, with Alibaba and Wanda as 2 of the most likely buyers.
Alibaba in talks for FIFA sponsorship
A recent stream of global sports investments from China has bounced back into the headlines, with word that e-commerce juggernaut Alibaba (NYSE: BABA) is near a major sponsorship deal with soccer giant FIFA, even as a Chinese businessman has just signed a separate deal to buy British club Aston Villa. The 2 latest deals spotlight China’s sudden fascination with global sports, as millions of Chinese embrace these globally famous names over local leagues that are far less professional and tainted by corruption scandals.
Nearly all of the deals to date have been focused in Europe and on soccer, which is hugely popular in China. But basketball is equally popular in the world’s most populous country, which raises the intriguing question of when we might see a Chinese buyer bid for an NBA team, in what would be a first-of-its kind deal sure to make global headlines. Read Full Post…
Bottom line: Alibaba’s new lower-key approach to publicizing its fight against piracy is in response to an embarrassing spat with a major industry group, and looks like a smarter way to handle its anti-counterfeiting efforts.
Alibaba takes lower-key approach in anti-piracy fight
Just days after a high-profile and embarrassing tussle with some of the world’s top luxury brands, e-commerce giant Alibaba (NYSE: BABA) is trying to put the matter in the past by reaffirming its commitment to fighting piracy outside an industry alliance it previously joined. At the same time, the company’s talkative chief Jack Ma was uncharacteristically quiet after a trip this week to Washington to meet with unspecified officials.
Anyone who has followed Alibaba for a while knows this kind of behavior is quite typical for the company. Alibaba’s is usually quite talkative and self-promotional, which reflects Ma’s own nature. But that high-profile behavior often magnifies the inevitable setbacks that occur for any company of this size, and Alibaba and Ma often go into “quiet mode” after such negative news. Read Full Post…
Bottom line: Alibaba’s new co-production deal with Paramount suggests the pair could soon form an equity alliance, following Paramount’s February announcement that it may sell a stake of itself to a strategic partner.
Alibaba Pictures invests in 2 Paramount films
The hyperactive Alibaba (NYSE: BABA) is in yet another major headline today, forming a tie-up to co-produce 2 of the most successful movie franchises from Hollywood giant Paramount. But what’s most intriguing about this latest deal is the timing, since it comes just over a month after Paramount announced it may be preparing to sell a stake of itself to a Chinese buyer.
Paramount announced that intent in late February, as part of a broader move by Hollywood to cash in on China’s booming box office that is the world’s second largest behind only the US. (previous post) Paramount and the other Hollywood studios also like the fact that Chinese buyers are often willing to pay big premiums for big-name brands, which should theoretically help to boost the stock prices of those foreign companies. Read Full Post…
Just a day after fast-growing car services firm UCar confirmed a major new tie-up with e-commerce giant Alibaba (NYSE: BABA), we’re getting more details about the new alliance that appears to auger an end to Alibaba’s previous relationship with homegrown Uber rival Didi Kuaidi. At the same time, Alibaba has just announced its largest overseas purchase ever by paying $1 billion for a controlling stake of Southeast Asian e-commerce specialist Lazada.
These 2 news items continue a recent acceleration in M&A activity for the hyperactive Alibaba, which is quite in line with the hyperactive nature of its founder and chief pilot Jack Ma. This kind of cyclical hyperactivity has become the norm for Alibaba in recent years. It typically sees the company’s high-profile activity go into overdrive for a year or so, only to come to a sudden halt when things become overheated and problems emerge. Read Full Post…
Bottom line: Wanda’s new FIFA sponsorship is an opportunistic and savvy move both politically and financially, while CMC’s new smaller soccer investment also looks like a good play to win goodwill from Beijing.
Wanda, CMC in new soccer plays
China’s recent fascination with global sports deals continues, with word of major new tie-ups involving 2 big fans of President Xi Jinping’s recent call to improve the nation’s poor performance in soccer. The larger deal has an opportunistic Wanda Group signing on as China’s first top-tier sponsor of FIFA, the world soccer body whose reputation has suffered lately due to a major corruption scandal. The second deal has the acquisitive China Media Capital (CMC) investing in in SoccerWorld, a British operator of sports stadiums.
Both deals have a strongly political element, since Chinese President Xi Jinping is personally a big soccer fan and has appealed to China’s private sector to help improve the nation’s performance at the world’s most popular sport. Some of China’s other top corporate leaders have also answered that call, including Alibaba (NYSE: BABA) founder Jack Ma, leading web portal Sina (Nasdaq: SINA) and electronics retailing giant Suning (Shenzhen: 002024). Read Full Post…
Bottom line: Mark Zuckerberg’s latest visit to Beijing and meeting with a top propaganda official show his hopes of bringing Facebook to China are still alive, and could result in announcement of a new joint venture by year-end.
Facebook’s Zuckerberg back in Beijing
Facebook (Nasdaq: FB) chief Mark Zuckerberg may not have much chemistry with Chinese President Xi Jinping, but he certainly seems quite capable of getting meetings with high-ranking Chinese Internet and propaganda officials. Just a couple of months after returning from paternity leave for the birth of his daughter, Zuckerberg was back in Beijing over the weekend to attend a government-sponsored forum, as he pursues his aim of bringing Facebook to the world’s biggest Internet market.
Zuckerberg is certainly no stranger to meetings with top Chinese officials as he pursues his goal. Last year he made headlines when he reportedly asked President Xi Jinping to choose an honorary Chinese name for his daughter during Xi’s state visit to Washington, even though his request was ultimately declined. And in late 2014, he hosted a tour at Facebook’s Silicon Valley campus for Lu Wei, minister of the Cyberspace Administration for China. Read Full Post…
Bottom line: Domestic buyers are likely to comprise most of the investors in Ant Financial’s latest fund raising, though the use of foreign advisers indicates some overseas participation may also be allowed.
Ant Financial raises new funds
Ant Financial, the financial services arm of e-commerce giant Alibaba (NYSE: BABA), is going back to investors for a new mega fund-raising, just a year after taking money from private investors for the first time. But any foreigners hoping to buy into Ant will probably be disappointed, since it appears this new funding round will be mostly open to Chinese institutional buyers. Likewise, Ant’s IPO that could come as soon as next year is likely to happen on one of China’s domestic stock markets, again locking out foreign investors.
Perhaps it’s only fair that foreign investors stand on the sidelines in Ant’s high-growth story, since such investors already have easy access to some of China’s top private companies that are listed overseas. By comparison, domestic Chinese investors have little or no access to shares of Alibaba, Baidu (Nasdaq: BIDU) or Tencent (HKEx: 700), even though that trio of corporate giants derive nearly all their money from China’s booming Internet market. Read Full Post…
The following press releases and news reports about Chinese companies were carried on March 3. To view a full article or story, click on the link next to the headline.
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Qualcomm (Nasdsaq: QCOM) Fined $7.5 Mln in US for Bribery in China, Denies Charges (Chinese article)
Jack Ma’s Ant Financial Said to Be in Talks for Caixin Stake (English article)
Sina (Nasdaq: SINA) Reports Q4 and Fiscal Year Results (PRNewswire)
Deadline Expires for Minsheng Bank (HKEx: 1988) in Talks for HK Broker Quam Stake (HKEx announcement)
Ele.me Says Working with Alibaba (NYSE: BABA) on Take-Out Dining, Denies Merger (Chinese article)
