Bottom line: Strong demand for Alibaba’s newly issued bonds testifies to its popularity among investors, especially short-term traders, and the debt is likely to see high trading volumes before activity settles down next year.
Investors clamor for Alibaba bonds
It seems that anything with the Alibaba (NYSE: BABA) name is in huge demand these days, with word that a massive $8 billion bond offering by China’s leading e-commerce company was massively oversubscribed. To put things in perspective, the previous largest bond program by a Chinese Internet firm came earlier this year from social networking leader Tencent (HKEx: 700), which announced plans to raise up to $5 billion. But unlike Tencent, which had to sell the bonds in several offerings over a few months due to the big amount, Alibaba has been able to easily sell its entire $8 billion offering in a single shot. Read Full Post…
Bottom line: Shanda is likely to sell a controlling stake of its Cloudary online literature unit to an outside buyer, possibly Tencent, as part of a drive to hand over management of its major units to strategic partners.
Shanda’s Cloudary in rumored sale
The slow-motion break-up of former online entertainment high-flyer Shanda Interactive is back in the headlines, with reports the company has sold its online literature unit to Internet heavyweight Tencent (HKEx: 700). This particular rumor looks logical enough for reasons I’ll give shortly. But I’ve heard so many rumors about sale of part of all of Shanda over the past year that I’ll only believe this latest report when we hear an official confirmation. What’s clear from these latest reports is that Shanda founder and chairman Chen Tianqiao continues to look for opportunities to sell part or all of his company, as he reportedly grows restless with his lackluster businesses whose growth has stalled. Read Full Post…
Bottom line: Shares of Alibaba could be due for a pull-back as investors become aware of its aggressive spending and shrinking profits, which could benefit the more conservative Tencent and Baidu.
Alibaba wows Wall Street with mediocre results
Everyone is buzzing about the maiden earnings report from newly listed e-commerce giant Alibaba (NYSE: BABA), which shows strong revenue growth and rapidly shrinking profits. So rather than repeat everyone else by simply reviewing the numbers, I’ll take this occasion to compare the Alibaba figures with those from leading rivals Tencent (HKEx: 700) and Baidu (Nasdaq: BIDU), often called the Internet “big 3” of China and increasingly referred to collectively by the name BAT. Read Full Post…
Bottom line: Sohu’s latest results hint at lingering weakness in online games and Internet advertising, while online video also continues to suffer amid a regulatory crackdown.
Sohu looks weak in games, advertising
The latest results from diversified web portal Sohu (Nasdaq: SOHU) are quite a mixed bag, with its lackluster search business finally showing some promising signs of accelerating growth, even as its core advertising and online gaming businesses sputter. Then there’s its money-losing online video business, which is facing a growing number of hurdles due to a regulatory crackdown, just as the unit looks set to make a minor acquisition that probably won’t add very much to its future prospects. Read Full Post…
Bottom line: Improved working environments are allowing Chinese tech firms to compete with multinationals for top talent, a template that state-run firms and other industries would be wise to follow.
Xiaomi attracts top exec from Spotify
Fast-rising smartphone maker Xiaomi made headlines last week when it lured away a top western executive from European online music streaming giant Spotify by offering him an attractive new job at its Beijing headquarters. The move marks the latest in a stream of high-profile defections by technology executives from comfortable jobs at major western firms to join up-and-coming Chinese names like Xiaomi and Baidu (Nasdaq: BIDU).
The movement reflects a maturation for China’s fast-growing high-tech sector, whose rapid rise and improving working conditions are making companies more competitive with big western names traditionally preferred by many highly-skilled workers. But the trend is still limited mostly to China’s private high-tech sector, and is largely absent in state-run firms and other industries. Read Full Post…
The near-monopoly held by Tencent’s (HKEx: 700) WeChat in China’s mobile messaging space could soon get a fresh shot of competition, with word that e-commerce giant Alibaba (NYSE: BABA) was in talks for an alliance to revive China Mobile’s (HKEx: 941; NYSE: CHL) fast-fading Fetion text messaging service. Such a powerful tie-up could take direct aim at the current stranglehold on the market held by WeChat, which now has more than 400 million active users and has become an indispensable communications tool for many. Read Full Post…
LeTV (Shenzhen: 300104) could become the first major victim of a rapid downturn sweeping through the online video sector, with speculation running rife about reasons behind a prolonged trip abroad by the company’s chairman and CEO. The growing speculation that Jia Yueting may be wanted for some kind of wrongdoing prompted LeTV to start the new week by halting trading in shares of its Shenzhen-listed stock, following a slide of more than 10 percent over the last 2 weeks.
LeTV’s stock decline is even more dramatic since the beginning of the year, with the company’s shares down nearly 40 percent from a peak in March when the world was still quite bullish about Chinese online video companies. Much has changed since then, as China’s regulator launched a crackdown on the sector starting this spring. That drive widened steadily over the summer months and has shown no sign of slowing. Read Full Post…
Beijing’s notorious smog was thick in the blogosphere this past week, with tech executives sending out a flurry of cautionary messages as the city held its annual marathon. This particular issue shines an important spotlight on the fact that many of China’s top tech firms are clustered in the Chinese capital, running the range from search leader Baidu (Nasdaq: BIDU) to top portal Sina (Nasdaq: SINA) and PC giant Lenovo (HKEx: 992).
Meantime, other interesting buzz in the blogosphere was coming from security software specialist Qihoo 360 (NYSE: QIHU), which finally admitted defeat in its anti-monopoly lawsuit against Tencent (HKEx: 700) after the case was denied a final appeal by China’s highest court. One final interesting tidbit came from several executives at Lenovo, which unleashed a flurry of buzz after the company’s announcement of vague plans to set up a separate unit dedicated to smart devices. Read Full Post…
A couple of new reports are shining a spotlight on the turmoil rippling through the online video space, following a period of huge optimism that ended earlier this year with a crackdown by Beijing. One report shows a major consolidation that took place last year could be getting ready to enter a second round, with word that struggling social networking (SNS) firm Renren (NYSE: RENN) is selling its 56.com online video unit to Sohu (Nasdaq: SOHU), one of the sector’s leaders.
The other report details a new spending binge on self-produced original programs by another leader, Baidu-backed (Nasdaq: BIDU) iQiyi. That trend is accelerating following the regulatory crackdown, which has made purchasing popular TV programs and movies suddenly much more difficult. That’s forcing sites to find other ways to keep their viewers entertained and maintain their viewership. Read Full Post…
The end has finally come for group buying site LaShou, though this former Internet superstar survived for far longer than I ever imagined it would before its newly announced acquisition by conglomerate SanPower Group, which owns a number of online and offline retail brands. Of course this acquisition doesn’t mean the actual death of LaShou, and it’s quite possible the company could still make a comeback under its new ownership. But its acquisition marks one of the final big consolidation moves for a group buying sector that saw explosive growth 3 years ago, followed by a major correction that saw most companies either close or get acquired. Read Full Post…
Wanda Group is already one of China’s leading commercial property owners, and now it’s taking aim at the fast-growing travel sector with word that it’s purchased a major travel agency in affluent Zhejiang province. There’s no financial detail on the deal, but the purchase should help to bolster Wanda’s position that has already made it China’s leading travel company just 2 years after its formation. The group could ultimately become one of China’s leading integrated travel and leisure companies if it eventually lists, providing an attractive alternative to the crowded field of publicly listed firms like online travel agent Ctrip (Nasdaq: CTRP) and leading hotel operator Home Inns (Nasdaq: HMIN). Read Full Post…
