Category Archives: Stocks

by | March 28, 2014 · 2:08 pm

Y!mobile on the run

 

Yahoo Japan Corp is Japan`s biggest internet portal and SoftBank own a 42,6% stake in Yahoo Japan. Yahoo Japan Corp will try to buy mobile network operator eAccess for 324 billion yen ($3,17 billion). The stock slid -6,38% yesterday.

eaccess and softbanky_mobile

They will try to launch their own mobile internet service and their new Y!mobile service would aim for more than 20 million users. The purchase is scheduled for June 2 and will follow eAccess` planned merger with wireless provider Willcom, which is also a member of SoftBank group.

Combined they have about 10 million users. Yahoo`s President Manabu Miyasaka said they want additional 10 million users, and they do this because they want control over their own sales channel and service, so they launch this as a standard mobile operator with a simple pricing structure.

SoftBank have a 99,68% stake in eAccess but will have only 33,29% voting rights due to regulatory restrictions. SoftBank launched the Apple Inc iPhone in Japan. They aquired the mobile carrier Sprint Corp last year (No 3 in U.S).

The telecom is extremely attractive to companies like this. They will be nothing without this connections. It`s a growing demand for mobile devices, and consumers in Japan will have an average of six mobile devices each, including wearables and mobile devices in cars, Yahoo`s president said.

Yahoo need to slash prices to win market share against their competitors like NTT DoCoMo Inc and KDDI Corp, as well as their own parent SoftBank, because Japan`s telecom market is ultracompetetive.

SoftBank bought eAccess for 180 billion Yen in 2012 to meet the rising demand for bandwidth as smart phone users surf the web, watch videos and play games. They need to be prepared for faster network demand.

Yahoo Japan will start the new service called Y!mobile and share phone networks with SoftBank, once eAccess acquires Willcom in June. Yahoo Japan hope to win more users who will turn more frequently to their marketplace and auction sites and boosting their e-commers and online advertising businesses.

As the Yahoo president say; they are trying to do something wild, and not be in a status quo position. So are SoftBank doing it. They have been pursuing investments in internet firms around the world, and have a stake in Yahoo Japan, and a 36,7% stake in Chinese e-commerce company Alibaba Group.

A listing of Alibaba would be one of the largest IPO`s by an internet 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.

 

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by | March 26, 2014 · 1:45 pm

Alibaba IPO

 

I wrote about the company last year and now it is time to do it again. Alibaba Group Holding Ltd is a big fish which is preparing to launch perhaps the largest U.S stock listing ever of a Chinese company.

alibaba logo

Personally, I have been dealing with Alibaba for many years now, but most of the people don`t have a clue of what it is. Alibaba is a mix of Amazon, Ebay, Paypal and Google. The difference between Amazon and Alibaba is that Alibaba is connecting buyers and sellers, while Amazon buy from suppliers and sell the products to the customers.

Alibaba is more like Ebay Inc. Their role is more like a middleman role and does not operate like an auction. Taobao is Alibaba`s biggest website. It is a gigantic Chinese bazar with about 760 million product listings from 7 million sellers.

Merchants pay Alibaba for advertising and other services from Alibaba. They do not pay them to sell their own products. The no-fee model is part of Taobao`s appeal in China. Just like Google, the ads from merchants appear with Taobao`s product-search results.

Taobao is designed for small businesses, but Alibaba`s Tmall is another shopping site that is designed for bigger brands like Nike and Apple. Tmall has about 70.000 merchants. They charges each seller a deposit and an annual fee, as well as a commission on each transaction.

Taobao and Tmall accounts for more than half of all parcel deliveries in China. In 2012, the combined transaction volume of Taobao and Tmall topped $163 billion. That is more than Amazon and eBay combined!

Alibaba`s revenue is 1/10 of Amazon`s. The Chinese company doesn`t sell products like Amazon on its site. Alibaba`s revenue rose 51% (third quarter) to $1,78 billion, while Amazon posted revenue of $17,09 billion and a loss of $41 million in the same quarter.

Alibaba`s profit margin is 44,6% and net profit was $792 million. They could raise about $15 billion from their U.S IPO. This can move another stock; Yahoo, which own a stake of 24% in Alibaba.

It can move Yahoo before and after the IPO. Like the Facebook IPO, they may «suck the air» of the markets. Yahoo has a market cap of $36 billion. It`s early in the process, but it is estimated that the IPO range is about $160 billion.

Alibaba remains by far the biggest player in China`s fast growing e-commerce market. Their biggest competitor Tenchent Holdings Ltd is a powerful competitor because of their popular WeChat mobile-messaging application.

Going public will keep Alibaba in the race in the global market. Yahoo is down -2,0% today and -11,2% YTD. This can change because Yahoo is a takeover candidate. This is one of the pioneers of the web.

Yahoo is a great success story of the Net. The stock has returned 21% annually since early trading in 1996. The company have survived two bear markets to date, and was one of the tech companies in the tech bubble in the late 1990`s.

Report today:

08:30 AM ET Core Durable Goods Orders m/m
08:30 AM ET Durable Goods Orders m/m
09:45 AM ET Flash Services PMI
10:30 AM ET Crude Oil Inventories

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.

 

 

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by | March 25, 2014 · 1:21 pm

Chat battle

 

China`s largest listed internet company Tencent posted its slowest quarterly profit growth in two years. They have spent a lot of money to promote its mobile messaging app called WeChat and other e-commerce sites in competition with Alibaba Group. Marketing expenses is up 39% from the third quarter.

WeChat

Tencent is a third owned by South African e-commerce and media company Naspers and they plan a 5 for 1 split share on the company. This will take place from May 15. Tencent`s share price has more than doubled in the past years and their market cap is $138,7 billion.

Tencent gave an indication of WeChat revenue figures for the first time as it transforms from a massaging service to fully fledged mobile platform. WeChat is more than a chat platform. It`s everything from social networking and gaming to personal finance and booking taxis.

WeChat Q4 revenues is between 200-300 mln yuan ($32 – 49 million). Tencent`s President Martin Lau said last week that the WeChat and Mobile QQ together generated gaming sales of more than 600 million yuan in three months to Dec 31. The groups revenue is 16,97 billion yuan in total revenue for the quarter.

Line Corp from Japan is another competitor and they announced 2013 revenues of 34,3 billion yen ($338,38 million), making it last year`s top-earning non-gaming smart phone app. WeChat is worth about $64 billion.

The multiple uses of this app called WeChat offer far greater earnings potential than Facebook`s WhatsApp, which is «worth» $19 billion. 70% of the WeChat`s revenue comes from gaming and subscriptions and online ad sales rose 58% to RMB 1,5B. E-commerce transaction revenue nearly doubled to RMB 3,3B.

Tencent is fighting against the e-commerce giant Alibaba in mobile-based retail services and both groups recently announced plans to launch virtual credit cards using QR codes that function in a similar way to bar codes scanned by smartphones to process payments.

Those two groups has attacked China`s traditional banking sector and the central bank is considering regulations to limit the use of third-party payment systems offered by Tencent and Alibaba Group.

Tencent`s mobile massaging platform is dominant in China (totaled 355M, +6% Q/Q and 12% Y/Y. ). globally MAU`s for WeChat rose 5,7% in the fourth quarter to 355 million with a net income of 3,91 billion yuan ($631M) on revenues. Up 40% at 16,97 billion yuan ($2,74B).

WeChat`s MAU is nearly 3 times that of Sina`s Weibo, and 24% smaller than WhatsApp`s 465M (as of February). MAU`s for Qzone social networking platform rose 4% Y/Y to 625M. Instant messaging MAU`s rose only 1% to 808M.

A month after Facebook spent $19B on WhatsApp, Alibaba (ABABA) is investing $215M into messaging/VoIP app Tango at a $1,1B valuation. Tango and BBM are close to each other in scale. WhatsApp claims a market-leading MAU of 465M. Tango claims 70M.

BlackBerry`s John Sims disclosed BBM`s base had grown to 85M MAU`s since the launch last fall. The Tango deal is only one of many investments made by Alibaba which is trying to grow their Web/mobile empire.

To compare: Renren (RENN) is declining and is headed for a fall of 40 – 45% drop. Online game revenue fell 39,6% in Q4 to $15,6M after dropping 17% in Q3. Ad revenue pressured by share losses to social media rivals such as Tencent and Sina, fell 17,9% to $10,2M after falling 11% in Q3. Monthly unique logins fell to 45M in December from 50M in September.

Sina surges on Weibo IPO news and Alibaba is spending $805M to buy a 60% stake in ChinaVision Media. A Hong Kong based producer of films and TV dramas. Youku (YOKU) remains the market`s biggest player on the fragmented online/mobile video market.

Strong competition is provided by Baidu, Sohu and Tencent. Alibaba, Baidu and Tencent have been constantly finding ways to encroach on each others turf. Tencent bought a 15% stake in #2 Chinese e-commerce firm JD.com. What a battle!

Yelp has been a hot stock and some investors say these stocks are «momentum monsters», and now you have the chance to get into a new IPO of the Facebooks game developer called Candy Crush. Wall Street is planning on selling 22 million shares. A valuation of $7,6 billion! Candy Crush made $159 million in 2013! Wow!

Reports today:

09:00 AM ET S&P/CS Composite 20 HPI y/y
10:00 AM ET CB Consumer Confidence
10:00 AM ET New Home Sales
07:00 PM ET FOMC Member Plosser Speaks

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.

 

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by | March 24, 2014 · 1:31 pm

AT&T up

A nice rally for Asian stocks today. Nikkei up +1,77% to 14,475 points. Hang Seng is up +1,91% to 21,846,45 points. Gold and Silver is down and European stocks are in the same direction; in a red territory today.

100px-AT&T_logo.svg

U.S indices will open up today, and many investors are now bullish on AT&T. The investors have not been that bull since Apple chose AT&T as exclusive carrier for their original iPhone. The stocks dividend payout will lure income investors searching for yield.

So far this year has been bad for the shareholders at AT&T. The shares sank 9,2% in January and February and that is the worst start to a year since 2010. AT&T have like other in the same business faced increased price competition in the mobile market.

The drop pushed the dividend payout to the highest among the 30 stocks in the Dow. The average yield of stocks in the S&P 500 is about 1,9%, while 10-year Treasuries (USGG10YR) have paid an average of 2,52% in the past year.

Reports today:

09:45 AM ET Flash Manufacturing PMI

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.

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by | March 18, 2014 · 2:02 pm

Gold strategy

Gold is a safe heaven in times of inflation because it retains its value much better than currency-backed assets, which may climb in price, but drop in value. Gold has been a popular investment for investors for centuries. The experts say you should spend 10% of your assets in gold.

Gold

It`s easy to buy stocks, but investing in gold is something different. There are a number of different ways to invest in the underlying movements of the precious metal. If you invest in the wrong type of gold investment you can end up with an underperforming asset, even if the price of gold is moving fast in your favor.

 

Some people will try to tell you the story that empires were built on gold and how the fiat currency of the U.S will plunge and be worthless. The fact is that gold need to be treated in the same way. So, be careful and try to invest in the right option available for investing in gold.

 

You can buy physical gold, derivates contracts, gold mining stocks or exchange traded funds. Which one is the best to put the money in? Don`t invest in gold with the idea it always go up. It doesn`t. It goes up and down like any other investment products.

 

You can buy physical gold and safe-keep it in you own house. This is the most traditionally way of investing in gold. But it is also the most inefficient way to own gold. You can buy coins or bars from an online dealer.

 

Unfortunately, you have to pay sales tax on their purchase and more inefficiencies come up when you go to sell the gold you have since the IRS consider gold bullion and coins «collectables» which are subject to a higher maximum tax rate of 28%.

 

If you plan to store all your gold in your own home there may ba another problem. The risk is high when it comes to theft, fire and natural disasters. Another plan is to put the bold in a box at the bank, but that will cost a fee and you will not be able to access your gold if you want to sell it short.

 

Investing in gold futures or options makes you leverage a lager amount of the precious metal. You can profit on the price move depending on whether you are bullish og bearish in the market. The downside is that this strategy is very volatile. It`s up to you: you can turn a small amount of money into big profit or you can lose everything you have very quickly.

 

Another risky business is investing in mining gold stocks. Pick the right junior or major stock. Junior companies are small companies which is very speculative hoping to find a big score. Major miners are more established.

 

As the price of gold goes up, the margins of the companies go up as well. This can be reflected in their stock prices, but like other stocks, if the mining company have a poor management tbe price of shares will suffer even if the gold price moves higher.

 

ETF (Exchange Traded Funds) is probably the smartest way of investing in gold. The most popular gold ETF is SPDR Gold trust (GLD). One share is about 1/10 of an ounce of the spot price of gold.

 

Another ETF is the Market Vectors Gold Miners ETF (GDX) which tracks the major miners and the other one with the symbol GDXJ which tracks the junior miners. GLD tracks the movement of gold and have low expenses.

 

It is liquid and you can sell it whenever the stock market is open. Investing in GLD eliminates the storage issues and lower your risk. This investment is better than putting all your eggs in one basket. GDX and GDXJ will not always track the price of gold as GLD by being proxy for the mining industry as a whole. GDX and GDXJ spread the risk across multiple companies in the gold mining industry.

 

Reports today:

 

08:30 AM ET Building Permits
08:30 AM ET Core CPI m/m
08:30 AM ET CPI m/m
08:30 AM ET Housing Starts
09:00 AM ET TIC Long-Term Purchases

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.

 

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