Category Archives: IPO

by | November 7, 2014 · 4:35 pm

Ferrari IPO

Ferrari S.p.a is an Italian luxury sports car founded by Enzo Ferrari in 1929. Ferrari road cars are generally seen as a symbol of speed, luxury and wealth. Fiat acquired 50% of the company in 1969, and expanded its stake to 85% in 2008. Earlier this year Fiat announced its intention to sell its share in Ferrari. Piero Ferrari have a 10% stake in the company, while Fiat Chrysler Automotives have 90%.

Ferrari-Aurea-Spider-DGF-FA-1280x960

(Picture: Ferrari Aurea spider)

Ferrari is a strong brand, and the famous symbol of the Ferrari racing team is the Cavallino Rampante (prancing horse) black prancing stallion on a yellow shield, usually with the letters S F (Scuderia Ferrari), with three stripes of green, white and red (the Italian national colors at the top).

Ferrari sold 7,318 units in 2012. The sale dropped down to 6,922 last year, and the revenue was €2,3 billion in 2013. Up 5% from 2012. The company is struggling and in an U.S IPO they hope to raise at least $1 billion.

They struggle to compete with other automakers in Europe and the U.S, and the competition is tough. Tesla have great success with their new electric car with good comfort, technology and over 700 horsepower. Ferrari is also seen as a luxury car with a great vehicle (V8 and V12), but they are struggling. Why?

When you ask people about Ferrari, they think racing cars and especially Formula One, and that is probably an image problem. Formel One and Racing cars is not something for you and me. It`s something for Schumacher. Some people love Formel One and racing cars, but the market is unfortunately not big enough?

Ferrari F430 Spider runs on ethanol, and that hybrid will be in production next year. LaFerrari was put into production this summer. It`s called HY-KERS Concept, and the hybrid system adds more than 100 horsepower on top of the 599 Fiorano`s 612 HP.

The company has produced a number of concept cars such as Ferrari P4/5 and Ferrari SP12 EC, which have been commissioned by wealthy owners. Other quite radical cars is Ferrari Mythos and Ferrari Modulo, but the most recent concept car was produced in 2010, which is Ferrari Millechili.

The special projects program is a collaboration by Ferrari with Italian automobile coachbuilders such as Fioravanti, Pininfarina, and Zagato to build custom cars using selected Ferrari modes as a structural base. The first car under this program is the SP1, commissioned by a Japanese business executive. The second is the P540 Supersfast Aperta, commissioned by an American enthusiast.

Ferrari`s former CEO and Chairman Luca de Montezemolo, resigned from the company after 23 years, and is to be succeeded by Sergio Marchionne, CEO and Chairman of Fiat Chrysler Automobiles, Ferrari`s parent company. Marchionne merged Fiat and Chrysler into the world`s seventh-largest carmaker to better compete with leaders such as General Motors, Volkswagen AG and Toyota Motor Corp.

On 29 October 2014, the FCA group, resulting from the merger between manufacturers Fiat and Chrysler, announced the split of its luxury brand, Ferrari. The aim is to turn Ferrari into an independent brand which 10% of stake will be sold in an IPO next year.

Fiat Chrysler`s brands include Jeep, Fiat, Maserati, Alfa Romeo, Chrysler and Dodge, which all strong brands. They sold about four million cars and trucks in 150 countries last year. Fiat Chrysler declared bankruptcy right after the financial crises in 2009.

Marchionne want to raise cash to cover its expenses and said that the company will spend money on R&D and capital expenditures. The stock rose after the IPO news and Marchionne has stated that he want to increase production to 10,000 cars a year. That`s music in investors ears.

Fiat is putting its jewel on the market.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Leave a comment

Filed under IPO, Stocks

Tagged as , ,

by | October 2, 2014 · 2:08 pm

Zalando IPO

Zalando listed about 10% of its shares in the public offering on the Frankfurt Stock Exchange yesterday. The company`s €21,50 issue price was set at the upper end of its bookbuilding range, but their debut was described as disappointing by analysts yesterday. It seems like they all are preparing for the coming battle in this e-commerce business. Zalando is a big e-commerce retailer in Europe.

Zalando

Zalando is founded in 2008 by David Schneider and CEO Robert Gentz. Zalando is a multinational e-commerce company that specialises in selling shoes, clothing and other fashion and lifestyle products online. In addition they are a tech powerhouse, leading Berlin`s startup scene to the Frankfurt floor.

It is a German company and has since their start expanded to offer its retail services in a total of fourteen European countries. The company`s headquarter are in Berlin. They are inspired by US online retailer Zappos.com.

They started initially specialised in the sale of footwear but has since grown to encompass other areas of fashion, lifestyle and sports. Schulze said that Zalando is a European online retailer and not a pure German one.

Zalando`s offering is one of Germany`s most significant e-commerce IPO to date. Revenue from online shopping in the country is expected to grow 22% this year and 16% next year ($73,5 billion). More than half of Zalando`s revenue comes from Germany, Switzerland and Austria. They had 2 billion euros in sales for the 12 months ended in June.

Zalando shares rose 14% in their IPO debut in Germany. Nothing compared to Alibaba`s smashing success. As you know, Alibaba now are flush with cash and I think they will spend most of it in the overseas markets.

This could leasd to M&A activity. Wayfair.com is still unprofitable, but they will try to raise $350 million and that is about 2x estimated 2014 revenue. That`s a $2,35 billion valuation. Zalando is a Zappos.com clone in Europe, but both Wayfair.com and Zalando are growing fast, and much faster than Overstock in the U.S. Zalando`s sale rose 30% in the first six months this year. 3X revenue for Zalando will be about $7 billion valuation. Far away from Alibaba.

A lot of things will happen in this market in the future. M&A is the key to grow fast and be big and I will be impressed if Alibaba can deliver the goods as fast as they do in China. The same day, within a few hours. Impressive! This is the reason why eBay was kicked out of the market in China, according to Jack Ma. It will interesting to follow this business in the future. This is only the beginning of a success story.

Web investor Rocket Internet is also poised to list today.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Leave a comment

Filed under IPO

Tagged as , , , , ,

by | September 19, 2014 · 2:02 pm

All eyes on Alibaba Group today

If you buy Alibaba shares today, you will buy a piece of North American Island country, and not a piece of the Chinese online retail giant. You will simply buy and own a stake in a variable interest entity registered in the Cayman Island, because Chinese law forbids foreign ownership of strategic assets in China. So, if you buy Alibaba shares today, you would have no influence on management.

alibaba logo

Shares worth about $8 billion is not locked, which means you can sell them right away today. The rest of the IPO`s have a lockup period, which means you have to wait several months before you can sell them.

In addition; if you buy shares in Alibaba today, won`t be able to hedge. Options will listed on September 29. Alibaba Group will be assigned a «China domicile», and therefore shares can`t be included in the S&P 500 Index, which requires a U.S domicile.

As you probably know, Facebook, Twitter and Google are all banned in China, and it was not easy for eBay either. Jack Ma said eBay couldn`t deliver as fast as they could. But what about Alibaba in the west?

Is it gonna be easy for them to build a great express logistic system to deliver fast in the west, where domestic companies are favored over international companies like Alibaba? That`s gonna be interesting in the future, because Alibaba is trying to be a global leader.

In my opinion; Amazon is very expensive, and Alibaba is very cheap. All eyes on Alibaba (BABA) shares today!

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Leave a comment

Filed under IPO, Stocks

Tagged as ,

by | September 11, 2014 · 2:00 pm

The biggest IPO in history

I have been dealing with Alibaba for many years now, but for many other people, Alibaba is an unknown company. Alibaba is the unmatched e-commerce market leader in China. It holds about 95% of China`s C2C market (Taobao division) and more than 50% of the B2C market (Tmall division).

alibaba logo

Alibaba is set to trade under the new ticker symbol on NYSE; BABA, on friday, September 19th. I think that many will be shocked by Alibaba`s entrence in the West, because only a few investors have heard of the company.

Alibaba`s business is more profitable than Amazon and eBay put together, and the U.S`s dominance in the e-commerce sector is poised to fall with the air apparent to Amazon set to IPO. Alibaba`s IPO may herald the end of U.S E-commerce dominance.

When Alibaba enters the market in the West, the competition will increase and standardize prices around the world, which means Apple Inc can`t sell their iPhone 6 for one price in Europe and another in the U.S.

Ebay didn`t have chance to compete with Alibaba, so the decided to stop their business in China. Jack Ma said it was primarily because they wasn`t effective enough and couldn`t deliver so fast as Alibaba does.

Jack Ma is a great business man. In a letter to his shareholders he said in it, this single sentence about Alibaba`s culture, may revolutionize the way other companies do business. «I have said on numerous occasions that we will put customers first, employees second, and shareholders third».

Don`t forget those words by William Feater: The primary asset of any business is its organization, but as you already know; the customer is the God. Without any customers, you are completely dead. So, what will happen to Amazon and eBay`s customers is the big question now. Price and service are key factors now.

For every dollar in sales, Alibaba makes $0,43 in gross profit. In contrast, Amazon only manage to squeeze just $0,01 gross profit for every dollar in sales. Operating income in the three months ended June, was 42% more than the combined profit of Amazon and eBay for the same period.

Many people talk about bubbles, but this is not like what we saw in the dot-com boom in the late 90`s. Take a look at these Chinese companies which is not revenue-starved; Alibaba founded in 1999, Q2 2014: $2,54 billion in revenue. Up 46% Y/Y. Valuation; $155 billion.

Tencent founded in 1998, Q2 2014; $3,21 billion in revenue. Up 37% Y/Y, and last but not least; Baidu which is founded in 2000. Q2 2014: $1,93 billion in revenue. Up 58,8% Y/Y. This the best tech companies in China and all those three founders are the three richest in China, with Jack Ma on the top.

Ebay is out of the market in China along with Google, which was very profitable for Baidu. Of course the Chinese government is supporting their own companies, so it is not easy for the companies in the West to penetrate the Asian markets. It`s hard to say how well Baidu would be doing if Google hadn`t pulled out of China in 2010.

A report from China Internet Network Information Center said in June that China had 632 million Internet users and 527 million mobile Internet users. This is about the numbers of China`s middle class.

It is expected that this number of middle class in China will grow by 500 million over the next decade, and reach a whopping three billion by 2030, which mean a huge market for many start-ups in the west, but the big question is the Chinese government.

They have a habit of favoring state-owned or state-connected companies. An Internet startup with total potential revenues of $10 million in the U.S might achieve revenues of ten times more in Asia. It can be lucrative to expand in Asia, but sometimes not so easy.

WhatsApp is popular in Hong Kong, but WeChat dominates in China. Kakao Talk is the big thing in Korea, while the most popular chat app in Japan is Line. As you may know; Asia is not only China. What might work in China can be a flop in Korea, Japan, Singapore or Hong Kong.

Alibaba will change the Chinese corporate giant`s diverse range of business lines, from e-commerce marketplaces to logistics to financial services. A overseas IPO could prompt the firm to reassess its strategy for these business categories as well as the countries where it operates.

The West are protecting their companies just like the Chinese government. It was not so easy for Baidu, VIPShop or Youku Tudou in the overseas markets like the U.S, as they all are focused on the Chinese market. But Baidu is a search engine, while Alibaba is something different. Peope want to buy things cheap and Alibaba can fix that.

As Jack Ma said; «China is the main course, while developed markets like the U.S are merely dessert».

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Leave a comment

Filed under Emerging markets, IPO, Stocks

Tagged as , , , , , , , , , ,

by | September 10, 2014 · 2:18 pm

Who is Jack Ma?

Jack Ma or Ma Yun is a Chinese entrepreneur born in October 15, 1964. He is one of the most powerful people in Asia, and among the most influential people in the world. He is also selected by Forbes as one of Asia`s Hereos of Philanthropy for his contribution to disaster relief and poverty.

Jack-Ma-in-the-shadows

(Picture: Jack Ma, founder of Alibaba)

He is the Executive Chairman of Alibaba Group, a family of highly successful Internet-based business. One of them is Alibaba.com which is going public friday next week.

He was born in Hangzhou, Zhejiang Province in China. He is married to Zhang Ying and they have one daughter and one son who is currently an undergraduate student of California, Berkeley. At an early age, Jack Ma developed a desire to learn English, although he failed the entrance exam twice. He attended Hangzhou Teacher`s Institute (Hangzhou Normal University).

Ma graduated in 1988 with a bachelor`s degree in English. While at school, Ma elected student chairman. He later became a lecturer in English and International Trade at the Hangzhou Dianzi University.

Jack Ma started building websites for Chinese companies with the help of friends in the US. He founded China Yellowpages in 1995, widely believed to be China`s first Internet-based company. From 1998 to 1999, Ma headed an information technology company established by the China International electronic Commerce Center, a department of the Ministry of Foreign Trade and Economic Cooperation.

He founded Alibaba in 1999, which is a China-based business-to-business marketplace site which currently serves more than 79 million members from more than 240 countries and territories. Jack Ma`s Alibaba is planning to raise 20,1 billion in an IPO on friday next week.Alibaba`s mission is «To make it easy to do business anywhere».

Jack Ma serves as Executive Chairman of Alibaba Group, which is a holding company with nine major subsidiaries; Alibaba.com, Taobao Marketplace, Tmall, eTao, Alibaba Cloud Computing, Juhasuan, 1688.com, AliExpress.com and Alipay.

Alibaba`s online transaction volume exceeded one trillion yuan in November 2012, and Ma was thus labeled «trillion Hou», meaning literally «Trillion Yuan Marquis» in Chinese.

Alibaba launched Yuè Bao in 2013, which is a money market fund that users can invest in directly using Alipay. With $80 billion, it is the fourth largest in the world and is sending shock waves through China`s ossified banking system.

Alibaba is expanding into a dizzying array of fields, including cloud computing, messaging, mobile, mapping, TV, ride-sharing, taxi services, media and crowd-funding. Many of their investments have been with American companies like Amazon rival Shoprunner, ride-sharing service Lyft and Tango, which is a popular messaging app.

In 2009 at a shareholders Meeting, he encouraged those in attendance, including shareholders, customers and students from two Hong Kong universities, to take into their own hands and take action in the form of starting businesses to cope with the economic downturn rather than waiting for government of business to help them.

He reminded everyone that the great fortunes of the world were made by people who saw opportunities that others didn`t, and he noted that the aftermath of the recent global recession would be no different in terms of exposing new ways of doing business.

Jack Ma is a board member of Japan`s SoftBank and China`Huayi Brothers Media Corporation, and became a Chairman of the Board for the Nature Conservancy`s China Program after he stepped down from Alibaba as company CEO last year.

Alibaba`s IPO is the biggest U.S IPO in History!

The price range will be between $60 and $66 per share, which could value the company at well over $150 billion. The Alibaba IPO would make its offering the biggest U.S IPO on record, beating out Visa and Facebook.

Jack Ma is among the three richest in China. Which is Jack Ma ($11,2 billion), Ma Huateng ($15,6 billion), and Robin Li ($16,3 billion). They are all Internet entrepreneurs, but this is just the beginning. By the end of this year, 45% of the world`s Internet users will be from the Asia-Pacific region.

You can read more about Alibaba on this site. Search for Alibaba and read more about this amazing conglomerate company.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Leave a comment

Filed under Emerging markets, IPO, Stocks

Tagged as ,