The following press releases and media reports about Chinese companies were carried on March 25. To view a full article or story, click on the link next to the headline.
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Alibaba, Tencent, Ping AnInsurance JV Seeks $1 Bln Series A Funding (English article)
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…
Bottom line: Many of Alibaba’s older stakeholders are likely to sell some or all of their shares after their lock-up period ends, driving the stock down to or even below its IPO level over the coming months.
Alibaba lock-up period ends
Top managers at China’s Alibaba (NYSE: BABA) are almost certainly watching their company’s stock with acute angst this week, even as business continues as usual with word of the e-commerce leader’s latest overseas expansion into Korea. The angst is the direct result of an end to the lock-up period for Alibaba’s stock, which could technically flood the market with up to 340 million shares that were forbidden from trading for the first 6 months after its record-breaking $25 billion IPO.
Put differently, all of those shares would be worth about $29 billion at Alibaba’s current price, accounting for more than one-tenth of its total market capitalization of about $210 billion. The shares officially become eligible for trading when the lock-up period ends on Wednesday, March 18, which is exactly 6 months after the shares made their trading debut on the New York Stock Exchange. (Chinese article) Read Full Post…
Bottom line: Qihoo’s new smartphones, including its self-developed mobile OS, could perform well due to its strong software development record, potentially bringing some excitement back to its stock later this year.
Qihoo prepares mobile OS
I don’t usually have lots of positive things to say about Qihoo 360 (NYSE: QIHU), but I’ll admit I’m quite intrigued by the latest word that the security software specialist is preparing to roll out its own mobile operating system (OS). The new system, to be called 360 OS, will be based on Google’s (Nasdaq: GOOG) popular Android OS, so in that regard it will vie with many other Android variations in the market. But regardless of that, I would expect this new OS could quickly become a major player in the fiercely competitive space, drawing on Qihoo’s record as one of China’s savviest and oldest software and Internet product developers. Read Full Post…
Bottom line: Yahoo’s closure of its Beijing R&D center marks its final withdrawal from China, in a shift mostly related to internal issues but also reflecting the difficulties foreign Internet firms face in the tightly controlled market.
Yahoo closes Beijing R&D center
Nearly 2 years after shuttering its Chinese email service, faded US search giant Yahoo (Nasdaq: YHOO) looks finally set to completely leave the China market, with word that it’s preparing to close up its sizable R&D shop in Beijing. I’m not intimately familiar with Yahoo’s current China assets, but it does appear that this move represents the shuttering of the company’s last major Chinese operation. The move also comes as Yahoo prepares to spin off its sizable stake in Chinese e-commerce giant Alibaba (NYSE: BABA) into a separate company, bringing an end to the company’s decade-long marriage with China. Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 19. To view a full article or story, click on the link next to the headline.
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Yahoo (Nasdaq: YHOO) To Close Beijing R&D Center (Chinese article)
Bottom line: The Baidu-led union of Uber and Yidao in China looks like a smart move for all 3 parties, but could come under strain due to internal and external factors that could ultimately lead Baidu to buy out the venture.
Yidao, Uber to merge in China
China’s rapidly evolving paid car services realm is creating some strange marriages, bringing together e-commerce leader Alibaba (NYSE: BABA) and social networking giant Tencent (HKEx: 700) last month with a merger of their taxi app services. Now we’re getting word of another unusual marriage, this time as leading search engine Baidu (Nasdaq: BIDU) steers domestic heavyweight Yidao into a union with global giant Uber.
This latest deal would come just 3 months after Baidu made a large investment in Uber, reportedly worth $600 million, and would give Baidu a solid foothold in the fast-growing market for Internet-based car hiring services. China’s other 2 Internet majors, Tencent and Alibaba, already had major Internet hired car assets through their strategic stakes in industry leaders Didi Dache and Kuaidi Dache, respectively, which surprised the industry when they announced a plan to merge last month. (previous post) Read Full Post…
The following press releases and media reports about Chinese companies were carried on March 18. To view a full article or story, click on the link next to the headline.
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Uber, Yidao To Merge Under Baidu-Led (Nasdaq: BIDU) Plan – Source (Chinese article)
Alibaba (NYSE: BABA) Post-IPO Lock-Up Period Ends, Releasing 340 Mln Shares (Chinese article)
Unicom Proposes Plan To Buy Back Up To 10 Pct Of Shares (HKEx announcement)
Phoenix Satellite TV Announces Full-Year 2014 Results (HKEx announcement)
Solar Power Installation To Hit 17.8 Gigawatts This Year, Ahead Of Forecasts (Chinese article)
Bottom line: Alibaba’s combining of its mapping and web browser units under a single leader marks the start of a necessary rationalization of its many acquisitions over the last 2 years, which could produce some odd pairings.
Alibaba combines UCWeb, AutoNavi units
After nearly 2 years of making billions of dollars in strategic acquisitions, we’re finally seeing an attempt by e-commerce giant Alibaba (NYSE: BABA) to integrate and rationalize some of those purchases through new tie-ups and other pooling of assets. In this case the integration is coming in an executive move, which is seeing the founder of its AutoNavi online mapping division leave the company. His former position will be taken over by the founder and head of Alibaba’s UCWeb browser division, combining the 2 units under the leadership of a well-respected tech leader named Yu Yongfu. Read Full Post…
Bottom line: Amazon’s opening of a shop on Alibaba’s popular Tmall looks like a shrewd move to boost its struggling China business, but is unlikely to raise its market share significantly.
Amazon opening store on Alibaba’s Tmall
Word that Amazon (Nasdaq: AMZN) will open a China store on Alibaba’s (NYSE BABA) popular Tmall marketplace has the online world buzzing that the US e-commerce giant is admitting defeat and failure of its China strategy. Some are even saying the move could mark an eventual closure of Amazon’s own China site, which has failed to attract a major audience despite huge investments by the company. But anyone reaching those conclusion should think again, as this particular move looks quite shrewd and could actually help Amazon to boost its struggling China business. Read Full Post…
Bottom line: Alibaba’s 2 latest big investments in Snapchat and Snapdeal look like good bets for strong financial returns, but are unlikely to produce any major strategic benefit.
Alibaba in talks for Snapdeal stake
I was a bit confused on my first reading of the headlines today, after seeing articles saying e-commerce leader Alibaba (NYSE: BABA) was in talks to invest in 2 companies whose “snappy” names sounded quite similar. But a closer reading made it clear that these were 2 very different deals, one involving the popular US social networking service (SNS) Snapchat, and the other involving a popular Indian e-commerce site called Snapdeal.
Despite their big geographic and product differences, these 2 deals seem to represent a growing trend for Alibaba, which is no longer acquiring companies but instead only buying small strategic stakes. The strategy looks mostly advantageous to the investment targets. That’s because it’s helping to push up the valuations of names like Snapchat and Snapdeal to frothy levels, much the way Alibaba used similar investments to pump up its own valuation in the run-up to its IPO last year. Read Full Post…
