A flurry of news on e-commerce leader Alibaba indicates the company continues to grow at a rapid pace, with the spike of activity perhaps hinting that the process for a highly-anticipated IPO could soon start or may have already even begun. Topping the headlines is news that Alibaba is negotiating a massive $8 billion new loan. At the same time, recent new financial data for the company have just come out from struggling US search giant Yahoo (Nasdaq: YHOO), one of the Chinese company’s largest stakeholders. And perhaps most intriguing, an analyst at Barclays has just published his estimated valuation for Alibaba, putting the figure as high as $55 billion.
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Shanda Ties With Alibaba 盛大牵手淘宝 合作失败可能性大
China’s unruly and highly competitive Internet space has created all kinds of interesting partnerships, with word of a new tie-up between e-commerce giant Alibaba and former online game leader Shanda Games (Nasdaq: GAME) emerging as the latest. The driving force behind most of these tie-ups is a desire to drive more traffic to Internet sites as companies search for more customers. In this case, it appears the 2 companies are aiming to sell e-commerce goods to Shanda’s millions of online gamers from Alibaba’s hugely popular TMall online shopping mall. (Chinese article)
Baidu Becomes Latest Sina Weibo Suitor 百度有意投资新浪微博
The list of companies looking to invest in Sina’s (Nasdaq: SINA) Weibo microblogging platform continues to grow with word that online search leader Baidu (Nasdaq: BIDU) has become the latest suitor to woo the popular social networking site (SNS). Word of Baidu’s interest comes weeks after e-commerce leader Alibaba was also reportedly seeking a similar tie-up with Sina, though that deal was said to have reached an impasse after the companies failed to agree on a price. (previous post) Frankly speaking, all 3 of these leading Internet companies seems to be a bit hyperactive at the moment with unrelated internal activities, prompting me to wonder if each potentially has too many distractions to craft a deal that will ultimately be good for anyone.
Facebook Forges Links, Sina Shuffles; Facebook未弃中国梦 新浪或将一分为二
News involving a new China tie-up by Facebook (Nasdaq: FB) will undoubtedly reignite speculation that the social networking giant could finally enter the world’s biggest Internet market in 2013, fulfilling the long-stated goal of company founder Mark Zuckerberg. Meanwhile in other Internet news, leading web portal Sina (Nasdaq: SINA) is reportedly undergoing yet another new internal shuffle, foreshadowing major changes in store for one of China’s oldest online companies in 2013.
Alibaba, Sina Haggle on Weibo Value 阿里巴巴与新浪就微博估值陷入僵局
I was surprised to see reports today that Alibaba and Sina (Nasdaq: SINA) have reached an impasse in their rumored negotiations for the former to buy a strategic stake in the latter, since both sides clearly want this deal to happen as it would greatly benefit both. But then I had a closer look at the reports, and my conclusion is simply that the 2 sides are still negotiating in an attempt to place a value on Sina, whose popular and increasingly influential Weibo microblogging service lies at the heart of their planned tie-up. Such disagreement is standard for this kind of negotiation, and I fully expect the 2 sides to reach a deal that should be one of the most significant tie-ups we’ve seen for China’s Internet space since the merger of leading online video sites Youku (NYSE: YOKU) and Tudou earlier this year.
Sina Weibo Sniffs E-Commerce With Alibaba 阿里巴巴或牵手新浪微博
New reports over the weekend have Sina’s (Nasdaq: SINA) popular but profit-challenged Weibo microblogging service sniffing out a strategic tie-up with e-commerce leader Alibaba, in what looks like a very smart tie-up to me if it’s true. Meantime in related news, NetEase (Nasdaq: NTES) is shuttering one of its main social networking services (SNS) sites, again reflecting how difficult it is to make money in the popular but cash-poor world of SNS. Let’s take a look first at the big news regarding a potential Sina-Alibaba tie-up, which would mark a major step in the drive by Sina Weibo towards becoming profitable.
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Alibaba Raises Profits, Jingdong Raises Money 阿里巴巴净利翻番 京东商城完成新融资
New reports from the e-commerce space show that Alibaba continues to dominate the sector with its popular TMall, even as leading rival Jingdong Mall shows no signs of easing its challenge as it has raised $400 million in new funds. Before I go any further in this discussion, I should add a disclaimer saying that both of these companies are private and not required to disclose any information publicly. As such, both have become masters at strategically giving or leaking information to the media that plays to their greatest advantage. That said, there’s usually at least some truth to the information they release, which is what makes it worth looking at.
Alibaba, Tencent, Ping An JV: Insuring Failure 阿里巴巴、腾讯和平安联手网上卖保险
I was quite intrigued when buzz first emerged last week about a new tie-up between Internet leaders Alibaba and Tencent (HKEx: 700) and insurance giant Ping An (HKEx: 2318; Shanghai: 601318), hoping we might see an innovative financial services tie-up between these 3 industry titans. So it came as somewhat of a disappointment when reports disclosed the companies would pool resources to simply launch a new online insurance joint venture. (English article; Chinese article)
Alibaba Buyout: Finally Something for Investors 阿里巴巴筹资为机构投资者提供良机
E-commerce leader Alibaba’s long-awaited announcement that it will buy back 20 percent of its shares from Yahoo (Nasdaq: YHOO) is finally offering investors something they haven’t seen in a long time: A new chance to buy into a Chinese Internet firm that actually earns money. Unfortunately for most investors, they won’t have a chance to buy into the company anytime soon, as Alibaba is likely to sell most of its recently repurchased shares to big institutional buyers willing to fork over a minimum of tens of millions of dollars and more likely hundreds of millions of dollars for a piece of China’s top e-commerce company. But smaller institutional and retail investors could also get their opportunity in the not too distant future, with word that the buyout deal announced earlier this week provides strong incentives for Alibaba to make its own IPO by the end of next year, a deal that could help to return some excitement to the struggling market for Chinese Internet stocks. Just a day after announcing its landmark buyback, Alibaba is reportedly already in talks with a number of institutional buyers who want to purchase some of the stake, including Singapore’s massive sovereign wealth fund Temasek, which wants to invest some $500 million, according to a Chinese media report. (Chinese article) That kind of investment wouldn’t come as a surprise at all, as Temasek has always been particularly bullish on China, with a special interest in companies that are leaders in their spaces. Earlier this month Temasek purchased a major stake in ICBC (HKEx: 1398; Shanghai: 601398) for $2.5 billion, picking up shares that were being sold off by Goldman Sachs (NYSE: GS). (previous post) I would expect to see other major financial investors, including other sovereign wealth funds, insurance companies and pension funds, buying into Alibaba in these latest talks, with a probable minimum investment of $100 million each. On the other hand, don’t look for any new strategic investors like Yahoo to sign on in this new round of stake sales. That’s because Alibaba’s founder Jack Ma seems determined to run his own show and, based on his unhappy experience with Yahoo, doesn’t want strategic investors looking over his shoulder and offering suggestions. But while strategic investors may be out, Alibaba is clearly aggressively courting the financial investors, seeking to quickly sign them up to help it pay off the billions in debt it is assuming to buy back the Yahoo stake for a total of $7.1 billion. The company already counts such big names as Japan’s Softbank and Russia’s Digital Sky Technologies among its current investors, and will no doubt be looking for more high profile names to raise its own profile. While anyone with less than $100 million is unlikely to get a stake in this latest fund raising round, there should still be plenty of opportunity to buy into Alibaba for smaller investors if it moves ahead with an expected plan for an initial public offering by the end of next year. Such an offering could come as a big boost for Chinese Internet stocks in general, which were once investor darlings but have become pariahs over the last year due to a series of accounting scandals. Investors have also grown increasingly intolerant of Chinese web companies that are losing money, which describes the big majority of firms to list over the last 2 years. An Alibaba IPO would address both of those issues, providing a company with reliable accounting due to its relatively long history and major foreign investors, as well as a company that is highly profitable. From a broader market perspective, an Alibaba IPO will be good for the market by offering a quality company with strong long term prospects both at home and abroad. But on the downside, that offering won’t come for at least a year, meaning the broader market for China Internet companies could remain in the doldrums for quite some time unless another exciting offering comes along.
Bottom line: Alibaba’s new capital raising will offer good opportunities for institutional buyers, and an IPO as soon as next year could return some excitement to the weak market for China Internet stocks.
Related postings 相关文章:
◙ Yahoo, Alibaba in Slow-Motion Divorce 雅虎和阿里巴巴踏上漫漫离婚路
◙ Alibaba-Yahoo Buyout: Back to Square One 阿里巴巴股权回购重回起点
◙ Alibaba’s Yahoo Buyback: Deal Finally Near? 阿里巴巴回购雅虎所持股权可能为期不远
Sina Tests Weibo Demand With Paid Offering 新浪试水微博增值收费服务
A half year after spinning off its Weibo unit with an aim to earning profits from the wildly popular microblogging service, Sina (Nasdaq: SINA) is taking the first step to generating significant new revenues from the business by rolling out a new premium paid service. The strategy is certainly necessary if Sina ever wants to earn a profit from Weibo, and I even like the fact that it’s charging a very modest fee for the service, at least initially, which should help attract customers. But I’m still quite skeptical that the strategy will actually work, as it’s always hard to get people to pay for something they’ve grown accustomed to getting for free. Let’s backtrack a moment and look at the details of this latest development, which has Sina rolling out a service that will allow Weibo users to get the new premium service for the modest fee of 5 yuan a month or 50 yuan a year, translating to less than $1 per month. (English article) The new service will allow users to get SMS notifications for some of their incoming posts — an offering that doesn’t sound that interesting since many users already access Weibo over their mobile phones. In theory the new service could be a major revenue generator, since the company could generate more than 1 billion yuan in annual revenue if even just 10 percent of Weibo’s 250 million users signed up for the service. But as I said already, the bigger issue will be getting people to pay for a service that they’re used to getting for free. E-commerce leader Alibaba Group has found out that such a switch can indeed be difficult, as reflected by the lackluster performance of its Taobao online auctions service. That service made headlines 7 years ago when it ultimately drove global leader eBay (Nasdaq: EBAY) out of the China market by offering its services for free; but since then, Alibaba has had a difficult time making significant profits from the business, due in large part to the fact that users don’t want to pay for something they’ve always received for free. I suspect that Weibo will learn a similar lesson with this latest premium offering, and would advise Sina to look at other options in its drive to make the platform profitable, including developing entirely new services that can leverage Weibo’s large user base.
Bottom line: Weibo’s new premium service is likely to fail due to lack of interest from users who are accustomed to getting the service for free.
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◙ Sina’s Weibo Suffers New Setback With Lawsuit 吉林市驻京办可能起诉新浪微博
Alibaba.com Blows Smoke With HiChina Spin-Off Plan 阿里巴巴网络分拆万网放烟幕弹
Alibaba.com’s (HKEx: 1688) new announcement that it may spin off HiChina, its Internet infrastructure service provider that it acquired just 2 years ago, has all the signs of valuation envy from an industry leader that feels unappreciated by investors. (English article) That’s the only reason I can give for the strange timing of this announcement, coming at the height of one of the worst IPO markets in the last 2 years and at a time when US-listed China companies are particularly out of favor. Let’s look at the numbers: Alibaba.com, easily China’s biggest B2B e-commerce site, purchased HiChina in 2009 for a price that gave it a valuation at that time of around $100 million. Now, an unnamed source being quoted by the Wall Street Journal is saying the IPO could value the company at up to $500 million, or 5 times what Alibaba.com paid for it. I’m sure Alibaba has brought some synergies to the company since the purchase and also invested more money in it, but a 400 percent increase in value in just 2 years seems a bit too rich to me. More likely, Alibaba.com is feeling underappreciated by investors, who have dumped its shares in recent months causing it to lose nearly half its value since July, with a current market cap of around $4 billion. That’s easily the lowest market cap for any category leader in China’s Internet space. Leading web portal Sina (Nasdaq: SINA) has a current market cap of $5.4 billion, while Baidu (Nasdaq: BIDU) and Tencent (HKEx: 700), the leading search engine and online game operator, boast sky-high valuations of $43 billion and $37 billion, respectively. Alibaba.com’s parent company, Alibaba Group, is also no doubt feeling some pressure to show stronger valuations from its units after investors purchased a stake in the parent company last week that valued it at a whopping $32 billion. (previous post) Considering that Alibaba.com is probably the parent group’s most valuable asset and worth just $4 billion, I’m not sure where the other $28 billion of that sky-high valuation is coming from. All that said, this HiChina spin-off plan looks like mostly a distraction to divert attention away from Alibaba’s industry-lagging valuations.
Bottom line: Alibaba.com’s plan to spin off its HiChina infrastructure services unit is a ploy to generate excitement to boost its own industry-trailing valuation.
阿里巴巴网络有限公司（Alibaba.com）(1688.HK)日前发布公告称，公司拟分拆两年前收购的互联网基础设施服务提供商万网（HiChina），後者将赴美上市，其估值颇令人眼红。这是我能想到此时发布公告的唯一原因。目前是两年来首次公开募股（IPO）市场最糟时刻之一，赴美上市的中国企业尤其不受投资者青睐。让我们来看看相关数据。Alibaba.com是中国最大的B2B电子商务网站，2009年以5.4亿元收购万网股权。《华尔街日报》援引一名消息人士的说法称，万网上市时的市值或高达5亿美元，是阿里巴巴网络收购价的五倍。我相信，收购万网後，阿里巴巴为其带来了一些协同效应，也对其投入了更多资金，但仅两年价值就增长4倍，我认为，这样的涨幅有点过高。更可能的情况是，阿里巴巴网络觉得不被投资者看好。投资者近几个月抛售其股票，致使该公司市值自7月来缩水近一半，目前约为40亿美元。在中国互联网领域，对于一个领军企业来说，这样的市值非常低。门户网站新浪(SINA.O)目前市值为54亿美元，百度(BIDU.O)及腾讯(0700.HK)的市值分别为430亿美元和370亿美元。阿里巴巴网络母公司–阿里巴巴集团也面临压力。多家投资机构上周投资阿里巴巴集团，促使其市值高达320亿美元。考虑到阿里巴巴网络可能是该集团最有价值的资产，但其市值仅为40亿美元，我不知道阿里巴巴集团高得离谱的市值从何而来。总而言之，分拆万网的计划看似多半是为了转移投资者对阿里巴巴网络估值的关注。
一句话：阿里巴巴网络有限公司计划分拆万网，目的是为了提升公司落後于行业的估值。
Related postings 相关文章:
◙ More Internet Froth in Alibaba Valuation, Dangdang Price War 阿里巴巴估值奇高凸显网络泡沫
