Bottom line: iQiyi won’t make an IPO next year even though Baidu would like to get the company off its books, while Renren’s privatization marks one of the last buyouts for a US-listed Chinese firm from a wave dating back to last year.
The year 2016 is winding down as an unmemorable one for Chinese IPOs, thanks to a rocky start that cast a chill over the entire space. That said, the new year could be a bit more lively, amid signs that China’s securities regulator is opening the gates a bit wider to new offerings. That signal could bode well for offshore listings as well, with word that loss-making online video site iQiyi, controlled by online search leader Baidu (Nasdaq: BIDU), is contemplating such an offering next year. Read Full Post…
The following press releases and news reports about China companies were carried on September 7. To view a full article or story, click on the link next to the headline.
Meituan-Dianping in Rumored Merger Talks with Baidu’s Nuomi, Dining Service (Chinese article)
Ctrip.com Proposes Offering of $750 Mln Convertible Senior Notes (PRNewswire)
China’s Online Chatter Muted Ahead of Apple (Nasdaq: AAPL) iPhone 7 Launch (English article)
Didi Chuxing Raises Shunfeng Car Service Prices 20-50 Pct in Some Cities (Chinese article)
Bottom line: Shanda Group is likely to emerge this year as China’s next major global investor with 2-3 major deals, while Renren’s plans to transform into a high-tech investment company stand a 50-50 chance of success.
Two former Internet high-flyers that later flamed out are looking for new beginnings in finance, with Shanda Group and Renren (NYSE: RENN) both discussing their transformation plans in separate reports this week. Shanda was once China’s leading online game operator, and its chief Chen Tianqiao dreamed of creating an online entertainment empire. Similarly, Renren was once China’s leading social networking service (SNS) opeartor, at one time often called the Facebook (Nasdaq: FB) of China.
But both companies got overtaken in recent years, and were largely marginalized by better-run rivals like Tencent (HKEx: 700), NetEase (Nasdaq: NTES) and Weibo (Nasdaq: WB). As a result, Shanda founder Chen Tianqiao has recently sold off the various pieces of his former empire, most recently closing the sale of his original Shanda Games operation. Renren is also in the process of privatizing, as its core SNS business rapidly shrivels. Read Full Post…
The following press releases and media reports about Chinese companies were carried on August 1-3. To view a full article or story, click on the link next to the headline.
Hisense (Shanghai: 600060) Pays $23.7 Mln for Sharp Corp Mexico Operations (Chinese article)
Renren (NYSE: RENN) Acting CFO Resigns, Interim CFO Appointed (PRNewswire)
Bottom line: Baidu’s spending blitz at Nuomi looks like a good but expensive strategy to help the company quickly pick up market share in the group buying space, and could pose a serious challenge to industry leaders Dianping and Meituan.
About Internet Giant Baidu
Internet giant Baidu(Nasdaq: BIDU) is making a major push into the group buying space, announcing a bold campaign that includes 20 billion yuan ($3.2 billion) in new spending as it aims to replicate its earliest success in online search. This particular campaign is focused on Baidu’s Nuomi group buying site that it purchased a year and a half ago, and has the site’s chief saying he aims to overtake industry leaders Dianping and Meituan in the next 1 year and 3 years, respectively.
This particular campaign surprised me a bit, as Baidu hasn’t really announced any major plans for Nuomi since buying the company from struggling social networking site Renren (NYSE: RENN) for more than $200 million. But this kind of move would be similar to what Baidu did with online travel site Qunar (Nasdaq: QUNR), which was already growing quickly when Baidu purchased a controlling stake in 2011. Since then, Qunar has made an IPO and Baidu has poured big money into the company, which is now posing a serious challenge to longtime industry leader Ctrip. (Nasdaq: CTRP) Read Full Post…
Bottom line: A new strategic investment in LightInTheBox by a major shoemaker is a vote of confidence in its turnaround story, while Bona Film’s buyout offer caps a week of record privatization activity for US-listed Chinese firms.
Last week’s privatization frenzy for US-listed Chinese firms saw one more company join the queue on the final day of the week, with movie maker Bona Film (Nasdaq: BONA) adding its name to the list of companies looking to end their relationship with fickle New York investors. That final offer brought the number of US-listed Chinese firms receiving buyout offers last week to 5, which must surely be a record for such bids in a single week.
Meantime, another interesting deal has seen underperforming e-commerce company LightInTheBox (NYSE: LITB) receive its own big new investment from one of China’s leading shoemakers. That deal saw Aokang Shoes (Shanghai: 603001) buy about a quarter of LightInTheBox’s shares, hinting at a major new direction for the foreign-focused e-commerce company and also implying it’s unlikely to de-list from New York anytime soon. Read Full Post…
Bottom line: A new management-led privatization bid for Homeinns and many other similar recent plans could stand a 50-50 chance of failing if they don’t complete the process before China’s stock market rally ends.
Leading budget hotel chain Homeinns (Nasdaq: HMIN) has become the latest US-listed Chinese company to receive a buyout offer, capping a record week that has seen at least 4 such bids. In the past, 4 privatizations in a 6-month period would be considered big, even though such bids have been coming at a slow trickle over the last 3 years for Chinese companies whose shares have languished on Wall Street. But that tickle has turned into a flood these last 2 months, fueled mostly by greed, as company owners look enviously at China’s rallying stock markets that have more than doubled over the last year. Read Full Post…
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.
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…
The following press releases and media reports about Chinese companies were carried on June 11. To view a full article or story, click on the link next to the headline.
Towers Watson, Shanda, Citic Vying for Russell Investments – Sources (English article)
Hunan TV’s Mango TV Raises 500 Mln Yuan, Valued At More Than 7 Bln Yuan (Chinese article)
Bottom line: WuXi PharmaTech’s privatization will be followed by at least 3-4 more similar buy-outs this year for US-traded Chinese stocks, including a 50-50 chance that Renren will attempt a privatization by mid-year.
I’m beginning to feel like I should start a betting list of Chinese candidates that may de-list from New York, following word that unappreciated drug maker WuXi PharmaTech (NYSE: WX) has become the latest company to announce a management-led buy-out. At the same time, dying social networking (SNS) site Renren(NYSE: RENN) has also announced results of its own recent Dutch auction-style share buyback plan, which also hints that it could become the next company to attempt a privatization. Read Full Post…
Bottom line: Rallies for Renren and 500.com stock on positive news are likely to be short lived due to both companies’ limited prospects, while 55Tuan’s IPO is likely to see more delays and its shares are unlikely to debut next week
As we head into the long weekend for the Easter and Tomb Sweeping holidays, a string of developments are providing a bit of cheer to shareholders of embattled social networking site Renren (NYSE: RENN) and online lottery ticket seller 500.com (NYSE: WBAI). Renren’s good news comes in a newly announced Dutch auction for its stock, a variation of traditional share buybacks. At 500.com, the good news comes in the form of chatter that Beijing will soon roll out new policies that pave the way for resumption of the online lottery ticket sales that are the company’s main business.