Bottom line: The intensifying spat between Sina and a dissident shareholder is likely to ultimately cool down without any legal action, and could see the addition of 1-2 new independent directors to its board.
Sina-Aristeia tussle headed for court?
The battle for reform at Internet stalwart Sina(Nasdaq: SINA) has taken a somewhat nasty twist, with a dissident shareholder threatening legal or other action following a power play by longtime CEO Charles Chao to deprive minority shareholders of influencing the company through use of the ballot box. This particular move doesn’t come as a huge surprise, as it’s quite typical of Chinese CEOs like Chao to believe they know what’s best and do their utmost to ignore anyone who disagrees with their view.
That said, Chao did sound a slightly conciliatory note in this battle for reform, which is being led by a dissident minority shareholder called Aristeia Capital. I’ll go into that shortly, though first we should review this colorful battle and also what it might mean for Sina. The company’s share price has taken a bit of a beating these last few weeks and is now down around 8 percent amid all the brouhaha. Read Full Post…
Bottom line: A dissident shareholder’s proxy battle for a seat on Sina’s board stands a chance of success, but the odds are probably 40 percent or lower due to large holdings by Sina’s CEO.
Sina board seat at center of proxy fight
One of the more lively investor plays to shake up an insular US-listed Chinese company is taking place at Internet stalwart Sina(Nasdaq: SINA), with a flurry of he-said-she-said statements coming from the company and dissident shareholder Aristeia Capital. This somewhat unusual development first made headlines about a month ago, when Aristeia unexpectedly announced it was nominating two people to Sina’s board to shake up the company. Sina has responded with its own series of announcements justifying why its own long-serving board members are the best fit for the company.
All of this will come to a head at Sina’s annual meeting on Nov. 3, when one of its five board members will stand for re-election. Sina wants its own long-serving candidate to win the spot, while both of Aristeia’s candidates are contesting the position. What’s interesting here is that Sina is one of the few US-traded Chinese companies where the founders and top managers really don’t have the kind of overwhelming control of its stock that you often see. That means this particular board seat could really be up for grabs, which could perhaps shake up this underperforming company. Read Full Post…
Bottom line: Focus Media could make a bid for Sina’s core web portal assets within the next year, following their co-investment in a fashion public relations specialist.
Sina, Focus Media invest in Bazaar
It’s a relatively slow time during the final dog days of summer here in Beijing, so I thought I would zoom in on an interesting new investment in a company called Bazaar Energy, which bills itself as a “fashion public relations solutions provider.” But what’s most interesting about this investment isn’t the company receiving the money, but rather the pair of companies providing the funding.
In this case it’s the pair of leading web portal Sina(Nasdaq: SINA) and outdoor media firm Focus Media (Shenzhen: 002027) that are providing the money, which appears to be quite a modest sum. This particular pairing is interesting less for the target company, and more because it brings together a pair of investors that were once intending to merge. Much has happened since that merger plan fell apart, and this new pairing raises the slim but still interesting prospect that this pair of companies might attempt to relaunch that plan. Read Full Post…
Bottom line: Sohu founder Charles Zhang should privatize his company in the next year and then sell off the pieces, or risk see his dwindling empire slowly become worthless.
Sohu’s incredible shrinking empire
You know you’re a CEO when you can call results like those just released by Internet company Sohu(Nasdaq: SOHU) “solid”. Of course that’s my sarcastic assessment, after reading the latest quarterly report that absolutely nothing upbeat about it from one of China’s oldest Internet companies. Nearly all of the numbers in Sohu’s latest report were down, with the lone exception of its online search business, whose anemic growth shouldn’t excite anyone.
Also down was Sohu’s stock, which slumped 6.4 percent after the results came out and is rapidly approaching lows not seen for nearly a decade. All that brings us to my assertion that perhaps it’s time for founder Charles Zhang to consider the unthinkable and break up his company and sell of the various pieces while there are still potential buyers. If he waits too much longer, those pieces will continue to diminish in value to the point where nobody wants them. Read Full Post…
Bottom line: Weibo’s lessening dependence on Alibaba is making an acquisition of the former by the latter look less likely, and raises the possibility that Weibo could instead make a play for its parent, Sina.
Weibo weans self from Alibaba
I’ve been predicting for a while that e-commerce leader Alibaba (NYSE: BABA) would soon make a bid for Weibo (WB), often called the Twitter (Nasdaq: TWTR) of China, due to an increasingly cozy relationship between the two. But the latest results from Weibo could prompt me to revise my earlier prediction, with the revelation that Weibo actually appears to be weaning itself from its heavy dependence on Alibaba.
This story has a number of threads, underpinned by a landmark tie-up that saw Alibaba buy 18 percent of Weibo 3 years ago, and then later increase that to the current level of 30 percent. The idea was that Weibo, which was losing money at the time of the original tie-up, could milk Alibaba’s connections with thousands of online merchants to find new business opportunities. Such a development did indeed occur, and last year business from Alibaba accounted for a whopping 30 percent of Weibo’s total. Read Full Post…
Bottom line: NetEase is likely to complete a spin-off of its news division, possibly through a sale to Sina, while Postal Savings Bank’s massive IPO will meet with tepid reception due to limited growth prospects.
NetEase plans portal spin-off
Two significant but very different IPOs are in the headlines as we get set for the Mid-Autumn holiday break, one from China’s vibrant private sector and the other from a big state-run behemoth. In the former category is NetEase (Nasdaq: NTES), one of China’s oldest Internet companies, which is reportedly mulling an IPO for its news portal, one of its original businesses with a history dating back to the 1990s. In the other news, China Postal Savings Bank has reportedly placed most of the shares for its massive $8 billion listing with a group of 6 cornerstone investors. Read Full Post…
Bottom line: A new alliance between Youku Tudou, Weibo and UCWeb, combined with reports of the imminent resignation of Youku’s CEO, point to a sale of Weibo parent Sina to Alibaba within the next 6 months.
New alliance hints at Sina sale
Two new developments involving several Alibaba-backed (NYSE: BABA) assets are hinting at a major new shakeup in the firm’s online video and social networking (SNS) division, which could include an acquisition of stalwart web portal Sina (Nasdaq: SINA) that I’ve been predicting for a while. This particular series of corporate shuffles is quite complex, but does seem to hint that Alibaba is trying to rationalize and synergize some of its major web-based entertainment and SNS assets outside its core e-commerce business. Read Full Post…
Bottom line: Sina’s award of Weibo shares as a dividend reflects recent strong momentum in Weibo’s business, while Phoenix New Media’s firing of 3 top employees for disciplinary reasons will undermine its news division’s credibility.
Sina gives Weibo shares as dividend
Two of China’s leading news portals are in the headlines today, led by word that industry stalwart Sina (Nasdaq: SINA) is giving stock in its Twitter-like Weibo (Nasdaq: WB) unit to shareholders as a dividend. That particular news comes as shares of both Sina and Weibo have soared over the last 2 months, as Weibo finally starts to realize its profit potential.
Meantime, Phoenix New Media (NYSE: FENG) is in more dubious headlines, with word that 3 high-level employees from its news division have been fired for “serious violations of discipline.” There’s no mention of criminal charges in the reports, which cite an internal memo to employees. But it’s a bit noteworthy that the wording is identical to the frequently used phrase for high Communist Party officials being probed for corruption. Read Full Post…
The following press releases and news reports about China companies were carried on September 1. To view a full article or story, click on the link next to the headline.
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Bottom line: Sina’s latest financials show it could be benefiting from recent woes at Baidu, while JD.com’s results show its growth is slowing as it moves towards its important goal of becoming profitable.
Sina jumps on strong profit growth
Two of China’s top Internet companies have just reported their latest quarterly earnings, with web stalwart Sina (Nasdaq: SINA) wowing Wall Street with new numbers that show its Twitter-like Weibo (Nasdaq: WB) service may finally be gaining some traction. Meantime, investors were less impressed by e-commerce giant JD.com (Nasdsaq: JD), which continued to post strong revenue growth but remained squarely in the loss column. JD tried to comfort investors by saying its operations are now quite profitable on a non-GAAP basis, but that didn’t seem to change sentiment too much. Read Full Post…
The following press releases and news reports about China companies were carried on August 10. To view a full article or story, click on the link next to the headline.
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HTC (Taipei: 2498), Alicloud Form Strategic Alliance in Virtual Reality (Chinese article)
Sina (Nasdaq: SINA) Reports Q2 Financial Results (PRNewswire)
China Extends Marriott-Starwood Deal Review by Up to 60 Days (English article)
BP (London: BP) Seeks Buyers for Its Half of China Petrochemical JV (English article)
China Film (Shanghai: 600977) Rises 44 Pct in Shanghai Trading Debut (Chinese article)
