Tag Archives: Alibaba

by | October 1, 2014 · 2:12 pm

Yahoo! retirees

If I asked you what Google is, you would say; a search engine. If I asked you about Apple, Twitter or Facebook, I assume you know what it is. But what if I ask you what Yahoo! Is? What is it? A site with different things?

Yahoo logo

You know what ebay is, and you know what PayPal is, and after years saying they`re better together, they are splitting up. I think that is a smart thing to do, and people shouldn`t worry, because both companies have so far been a part of people`s life since they`re first day.

Elon Musk sold PayPal to eBay in 2003 and it was a great match. It became easy for people to process payments for eBay sales. This split is all about growth. You can imagine what PayPal can do in the digital wallet business if they don`t have to worry about eBay?

Right now you feel like you must have a PayPal account to shop on eBay, but you don`t. And here is the key. Later on this month, Apple will launch the new Apple Pay, and that will crash with eBay and PayPal`s mirrage. The mirrage is now over, and it`s a tricky divorce.

Now, people can pay a dozen different ways, like Apple Pay, Bitcoin or PayPal and so on. That`s fair. It`s up to the people to make a choice. It depends on where they have an account. I think many will sign up for the new Apple Pay system. They will revolutionize the digital business, and probably have a monopoly in the market, but what about Yahoo? What are they doing? What is it?

Yahoo! is not expanding. They are going in the opposite direction. They closed Yahoo Education yesterday, because, as they say, it is outside of their core experience. In addition; Users`needs are already well served by alternative online resources.

They will also shut down the Qwiki app, which automatically created short movies based on events from a user`s camera roll. They will shut down the app on November 1, but the Qwiki team will continue to innovate on a new digital media experience for Yahoo users.

Yahoo started about twenty years ago as a directory of websites that helped users explore the internet. They are still committed to connecting users with the information they`re passionate about, and their business has evolved and at the end of the year (December 31, 2014), they will retire the Yahoo Directory.

Yahoo still owns about 16% of Alibaba and Yahoo`s market cap is $40,3 billion, but the value can approach about $46 bilion. Their core business are generating only about $700 million.

The cash made by the Alibaba IPO are more worth than the company`s current market capitalization, and the company could be fairly priced with a multiplier of only 5.

The stock can move from here, and the pressure to merge with AOL has pumped the stock. I don`t think people will jump into this stock before they know more about what direction it will move. Yahoo moved up +0,57% yesterday. Price; $40,75.

 

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 | September 16, 2014 · 1:56 pm

Will Alibaba raise its IPO price?

The demand for Alibaba IPO shares is going wild! So wild that they have decided to raise its IPO price range from $66 to $68. Alibaba is a step closer to its IPO as much as $21,8 billion. Yahoo! Inc and other backers plan to offer as much as 320,1 million shares.

alibaba logo

Alibaba`s Jack Ma have been on a roadshow, and told the investors that they will not seek too high a valuation, and they are offering the shares at a price-to-earnings multiple that`s below what other public traded Chinese Internet peers fetch.

Alibaba`s market value could be as high as $167,6 billion. China`s biggest search engine trades about 34 times estimates of this year`s earning. Tencent Holdings Ltd trades at 37 times, while Amazon trades to 133 times forecast 2014 earnings.

The average for similar Chinese Internet e-commerce companies trade at 43 times their earnings.

Alibaba will try to be a global company and plans to expand its business in U.S and Europe in addition to Asia. Ma said they will try to avoid a repeat of Alibaba.com`s failure which plummeted below its IPO price right after listing and ended up delisting the company in 2012.

Jack Ma listed the company at the peak of the Hang Seng in 2007 and delisted it at the bottom during the financial crises in 2008. The S&P traded at about 30 times earnings in 2000, but now it is trading at 18. The Alibaba IPO in 2007 was 257 times oversubscribed and we won`t see that kind again.

Jack Ma and Alibaba has been on the road for two weeks trying to meet investors and speak with them. They said they plan to set a final price for the shares on Sept 18. Trading start the day after, on friday 19.

Nasdaq rose to its highest since March 2000 this month. Is this the right timing for Alibaba?

 

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 | 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.

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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.

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by | May 20, 2014 · 2:01 pm

Mobile ad opportunity

Vodafone`s (VOD) FY EBITDA dropped 5,4%. Their revenue also slipped 1,9% to £43,6 billion. Net profit attributable to shareholders soared to £59,25 billion from £413 million in 2013, boosted by the sale of their 45% stake in Verizone Wireless for $130 billion.

Vodafone logo

Organic service revenue declined 3,8% in Q4. Adjusted operating profit dropped 37% to £7,67 billion, mainly due to a much lower contribution from Verizone Wireless before it was sold. Vodafone expects FY 2015 EBITDA to drop to £11,5 billion.

CEO Vittorio Colao say Vodafone`s emerging markets businesses have performed strongly. In Europe, the company continues to face competitive. Vodafone declared a final dividend of 7,47 pence a share, giving total dividends of 11 pence, up 8%.

Vodafone is the world`s second-largest mobile network operator and the Pan-European FTSEurofirst 300 Indes slipped today as Vodafone fell 4% after reporting huge impairment costs. Vodafone was the biggest faller on the FTSEurofirst 300 today.

The underlying profit continuing to move in the wrong direction and it seems to be very expensive to be in this competitive markets. AT&T bought Direct-TV to diversify and continue to grow its business.

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This makes AT&T strong, and Verizone, Sprint and T-Mobile should watch out, as AT&T has more leverage right now. Direct TV`s coverage map can reach 99% of households. Their mentions that cost savings will exceed $1,6 billion.

AT&T now have the ability to price itself lower than other competitors. AT&T`s CEO belive the deal will go through regulators in light of recent trends in telecom and communications. AT&T bought out Direct TV for $95 per share ($48,5 billion).

It`s probably better to be on the other side. Facebook are earning money on their direct ad mobile advertising. Now, Yahoo have the ability to do the same as Facebook. Yahoo is down -16,2% so far in 2014.

y_mobile

The Alibaba IPO can give Yahoo a huge opportunity as they have a potential in Yahoo`s mobile advertising. They can acquire mobile advertising firms like Millennial Media or AOL. This is what made Facebook a big growth company.

Yahoo have Yahoo Weather, Yahoo Finance and Tumblr. They have about 360 million global users and this amount of users can make Yahoo grow with a new mobile ad platform. Yahoo have the ability to buy Millennial Media cheap.

Anyway; Yahoo`s stake in Alibaba will give them a lot of cash, and you all know that Cash is King! Money is just a piece of paper. It ain`t worth something. Just the thing you can buy with the cash. So what is money? It`s just tools, and you need the tools to reach your goals.

Yahoo have a huge opportunity during the Alibaba IPO, and they can be a great growth company if they are doing the right things now. Yahoo have been on the market for a long time, and money will not be the biggest problem for them now. They need a great idea. Mobile ads can be one of them.

Read my article about Ymobile on March 28, 2014.

Reports today:
08:30 a.m EST FOMC Member Plosser speaks
08:30 a.m EST FOMC Member Dudley 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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