Tag Archives: SEC

FINANCE: SEC Hedges in Chicago Stock Exchange Sale Approval

Bottom line: A Chinese group’s plan to buy the Chicago Stock Exchange could get vetoed by the US securities regulator over concerns about the buyer’s inability to prevent the market from becoming a breeding ground for financial abuses.

SEC takes time on Chicago Stock Exchange sale review

Nearly a year and a half after it was first announced, the sale of the Chicago Stock Exchange to an obscure Chinese buyer is still awaiting approval, in what would be a relatively landmark deal in the finance space. I’ll admit I was a bit surprised to read that this particular deal was still pending, as I figured it was either dead or had closed by now.

The deal announced in February last year would see a group led by Chongqing Casin Enterprise Group purchase one of America’s oldest but also most irrelevant stock exchanges. Some politicians had voiced concerns about the deal for the usual reasons, namely the exchange could provide a foothold for China to wreak mischief in US financial markets. But CFIUS, the agency that reviews deals for national security concerns, previously approved the deal, leading all of us to believe it would get done. Read Full Post…

E-COMMERCE: Opportunistic Bears Feast on Alibaba, JD Stock

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…

E-COMMERCE: Alibaba Probed Again by SEC, But Does it Matter?

Bottom line: Alibaba will avoid being penalized in a new SEC probe, but may be forced to modify some of its aggressive accounting practices in a compromise with the US securities regulator.

Alibaba in new SEC probe

I’m beginning to understand why e-commerce giant Alibaba (NYSE: BABA) has been aggressively building a team of Washington lobbyists, following announcement of its latest clash with a US government agency. This time it’s the securities regulator that’s tussling with the aggressive Alibaba, with word that the US Securities and Exchange Commission is investigating the company for potential illegal accounting practices. The SEC is already well acquainted with Alibaba, following another unrelated probe of the company last year related to piracy in its online marketplaces. Read Full Post…

E-COMMERCE: Washington, Beijing Send Strong Signal to Alibaba on Fakes

Bottom line: The recent case involving criticism of Alibaba by Washington and Beijing over piracy should form a template for how the 2 governments can collaborate on commercial issues where they have common interests.

US warns Alibaba over fake goods

Washington and Beijing showed a rare sign of collaboration on commercial issues last week when the US sternly rebuked e-commerce giant Alibaba (NYSE: BABA) for widespread trafficking of pirated goods on its websites, reinforcing a similar message delivered by China at the start of this year. While it’s doubtful the US Trade Representative’s (USTR) office and China’s State Administration for Industry and Commerce (SAIC) consulted each other in their separate actions, the parallel moves showed just how effective the 2 governments can be when they work together in some of the many areas where their interests overlap.

That contrasts sharply with a more clashing style on many other issues like high-tech hardware security and new energy products, where both sides have similarly common interests but more often take actions that result in trade wars and angry verbal exchanges. Read Full Post…

INTERNET: New Intrigue at Qihoo With Coolpad Move, Insider Trading Charge

Bottom line: Qihoo is likely to soon take control of Coolpad by buying shares from its controlling stakeholder, while allegations of insider trading surrounding Qihoo’s recent buyout bid are unlikely to affect the company.

Qihoo eying Coolpad stake?

Security software specialist Qihoo 360 (NYSE: QIHU) is in a couple of noteworthy headlines as we end the week, led by an announcement that hints it could be close to buying a sizable stake in its smartphone partner Coolpad (HKEx: 2369). At the same time, Qihoo’s name has appeared in another headline that says a Guangzhou man is being accused of insider trading related to a plan announced last week to take the company private.

These 2 headlines aren’t really too related beyond the fact that they both involve Qihoo, whose aggressive business tactics and outspoken CEO have made the company a lighting rod for controversy. The Coolpad news reflects Qihoo’s recent aggressive push into smartphones, mirroring similar actions by many other Chinese Internet firms. The insider trading news is more reflective of China in general, where such dealing is rampant and largely tolerated by a securities regulator that has other larger issues on its agenda. Read Full Post…

INTERNET: Youku Joins Alibaba With SEC Probe

Bottom line: A new SEC probe into Youku Tudou’s accounting, following another probe into possible disclosure breaches by Alibaba, could undermine investor confidence in big Chinese Internet firms.

SEC probes Youku Tudou accounting

Just a month after e-commerce leader Alibaba (NYSE: BABA) said it was being probed for possible violations of US securities laws, former online video high-flyer Youku Tudou (NYSE: YOKU) revealed it is also being questioned by the US stock regulator for aggressive accounting practices that may have misled investors. The nature of the potential violations are quite different in each case, but both create a worrisome larger picture since they involve 2 of China’s biggest and most trusted Internet companies. Read Full Post…

INTERNET: High-Profile Alibaba Draws SEC Scrutiny

Bottom line: An SEC probe is likely to find that Alibaba misled investors by failing to disclose a government report about widespread piracy on its Taobao site, which will weigh on its shares for the rest of the year as it moves to fix the problem.

Alibaba under scrutiny by the SEC

E-commerce giant Alibaba (NYSE: BABA) is quickly learning that the publicity it craves can be a double-edged sword, with word the company is being investigated for failing to disclose important negative information in the run-up to its blockbuster IPO last year. I’ve never been a big fan of Alibaba’s tendency to hyperbole, even though I do think it’s a fairly well-run company and quite savvy in its core e-commerce area. My general view is that companies should let their performance be their loudest spokesman, and let investors decide the rest.

Alibaba founder Jack Ma is the antithesis of that approach, and loves to hype his company at every opportunity he can. His cheerleading skills helped Alibaba secure a valuation well above what many expected, allowing it to raise a record $25 billion in its New York IPO last fall. Now it seems that the US securities regulator is looking into whether Alibaba failed to disclose key information that could have significantly cooled investor enthusiasm for the company’s IPO shares. Read Full Post…

MULTINATIONALS: SEC, Big 4 Accountants Resolve China Clash

Bottom line: The SEC’s settlement with the Big 4 over their audits for US-listed Chinese firms is a positive step for everyone, and should be followed by a broader document sharing agreement between the US and China.

SEC, Big 4 settle China dispute

After more than 3 years of bickering, the US securities regulator has finally resolved a dispute with the Big 4 accounting firms over the way they handle their audits of New York-listed Chinese firms. The sudden settlement is a welcome development not only for both sides in the dispute, but also for the dozens of US-listed Chinese companies that employ the Big 4 as their official accountants. But all that said, the US Securities and Exchange Commission (SEC) must still take one more step and sign a more comprehensive agreement with its Chinese counterpart to ensure it has access to the documents it needs when investigating New York-listed Chinese companies. Read Full Post…

NEWS DIGEST: February 7-9, 2015

The following press releases and media reports about Chinese companies were carried on February 7-9. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════

  • China Says Will Protect US Firms’ Interests, Amid New Cybersecurity Rules (English article)
  • SEC, Big Four Accounting Firms in China Settle Dispute (English article)
  • Renren (NYSE: RENN) Leads $110 Mln Investment in Used Car Sales Platform Cheyipai (English article)
  • Tencent (HKEx: 700) Taps Overseas Debt Amid China New Economy Appeal (English article)
  • Strong Demand For Mate 7 Phablet Surprises Huawei (Chinese article)

News Digest: Oct 1-6, 2014

The following press releases and media reports about Chinese companies were carried on October 1-6. To view a full article or story, click on the link next to the headline.
══════════════════════════════════════════════════════

  • iPhone 6 & iPhone 6 Plus Available In China On Friday, October 17 (Businesswire)
  • Alibaba (NYSE BABA) Makes Investment in Shiji Information Technology (Businesswire)
  • New Oriental (NYSE: EDU) Announces Completion Of SEC Investigation (PRNewswire)
  • Cellular Tower Firm Completes Provincial Organization, Includes 57 VPs (Chinese article)
  • ZKenergy Science & Technology Sues Wuxi Suntech Power (PRNewswire)

Taiwan Fines Xiaomi, China Should Take Note

Xiaomi fined for inflating sales

Media-savvy smartphone maker Xiaomi was in the headlines for the wrong reasons last week, facing a fine and embarrassing negative publicity after being exposed for inflating its sales figures in Taiwan. The news marked the latest in a steady string of accounting scandals and other financial misreporting that have plagued overseas-listed Chinese companies for the last 3 years, undermining their credibility and casting a negative shadow on China’s own stock markets. Read Full Post…