Tag Archives: Alibaba

by | May 7, 2014 · 2:09 pm

How to buy Alibaba IPO shares

 

This will probably be one of the biggest IPO (Initial Public Offerings) of all time. The stock could double right after the opening for trading, but unfortunately, those shares will be impossible to acquire prior to the offering.

alibaba logo

So, what are you gonna do, if you want to get in on the Alibaba IPO? You can get in by walking in the backdoor into this offering. I think the best thing is to invest in Alibaba`s biggest shareholders like Softbank or Yahoo.

 

They own 37% and 24%. Because of the stake they both have in Alibaba, they are both up 76% (Yahoo) and 114% (Softbank). Last year have been good for both of them. Softbank`s outperformance of Yahoo can be attributed to its larger share of Alibaba.

 

Yahoo`s stake is worth $31 billion and that is about 80% of its market cap. Softbank`s market cap is $99 billion and its investment in Alibaba could be worth about $80 billion. Softbank paid $20 million for its investment in 2000. Now it is about $4 billion, and that is a good investment.

 

Softbank is probably a better investment than Yahoo because of its Alibaba holdings which is a smaller portion of its market cap. If Alibaba`s shares doubles the first day, the sum of Softbank`s shares will be worth about $150 billion, and that is above 50% higher than its market cap today.

 

You can also buy SPDR S&P International Telecommunications Sector ETF (IST), if you belive Softbank is a better investment than Yahoo. Softbank is the second largest weighting at 9,42% in this ETF mutual fund.

 

If you thing Yahoo is a better bet, you can buy First Trust Dow Jones Internet Index Fund (FDN) which have a weighting at 4,12%. Other investment opportunities to consider is Baron International Growth Fund (BIGFX) and American Funds New Economy Fund (ANEFX).

 

The last funds mentioned does not have a huge stake in Alibaba. American Funds New Economy are benefiting from tech and innovation, but their weighting in Softbank is just 1,42% and only 0,48% in Yahoo.

 

You can also consider Renaissance IPO ETF (IPO) which adds companies on the fifth day of trading and sells them about two years later. I think Alibaba will be added, but this will be a long-term investment and you need to wait before you jump in.

 

Krane Shares CSI China Internet Fund (KWEB) started its business in July 2013. They will start to buy after day 11 of trading. You have to remember that none of these investments are perfect. It`s risky to buy IPO stocks and I have never done that.

 

All this is just a scenario and I say the stock can double the first day, just to make an example. Alibaba`s decision to list in the U.S was a blow to the Hong Kong Stock Exchange. Former English schoolteacher and lead founder Jack Ma owns 8,9% of Alibaba, and he will be one of the richest in China.

 

Reports today:

08:30 a.m EST Prelim Nonfarm Productivity q/q

08:30 a.m EST Prelim Unit Labor Costs q/q

10:00 a.m EST Fed Chair Yellen Testifies

10:30 a.m EST Crude Oil Inventories

01:01 a.m EST 10-Y Bond Auction

03:00 a.m EST Consumer Credit m/m

 

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.

 

2 Comments

Filed under Commodities, Stocks

Tagged as , ,

by | April 25, 2014 · 2:02 pm

Is this an Amazon killer?

Gold is still below $1300, trading at $1,295,40. Up today +0,37%. Silver jumps +0,73% to $19,58. Crude Oil (brent) is down today -0,43% to $109,86, together with Copper which is down -0,21% to $308,15.

Nikkei was in a green territory today, trading at 14,429. Up +0,17%, also European markets are trading lower today. Investors hate war and some are worried as the Ukraine crisis deepens. The Euro Zone`s blue-chip Euro STOXX 50 index slid -0,5% while the DAX is down -1,12%.

amazone

Amazon (AMZN) will open in a red territory today. About -2%. Amazon reported Q1 EPS of $0,23 (like forecast). Revenue for the quarter came in at $19,74 billion. That`s above consensus of $19,42 billion.

Amazon said in a report yesterday that Q2 2014 revenue will drop down to about $18,1 – 19,8 billion versus consensus of $19,03 billion. “We get our energy from inventing on behalf of customers, and 2014 is off to a kinetic start,” said founder and CEO, Jeff Bezos.

The delivery cost has been rising since 2009 and Amazon want to take more control over their increasing cost. With Amazon Fresh, they will deliver the goods direct to the customers and also control their customers shopping experience.

Millions of Amazon customers don`t know this and Amazon is growing at a faster speed than UPS and FedEx who are responsible for shipping the majority of Amazon`s packages. Last mile, as they call it, will revolutionize how shipments are delivered to millions of customers, they said.

Amazon will start to deliver on Sundays in the U.K. This is a smart move I think, because it lowers the cost and make it difficult for their customers in the same market. Like Alibaba who is planning to go public in a very short period of time.

Based on gross trading volume, Alibaba actually outsells Amazon and Ebay combined! They are more than just an e-commerce company. In addition, they now have a banking system without government intervention.

Many will be surprised to hear that this China-born innovator holds around 50% of China`s mobile and online payments market. Alibaba`s payment system is called Alipay and syncs directly with its B2C and C2C commerce sites, Taobao and Tmall. This is impressive.

Last year they entered the banking industry, but how is that possible without China`s government, a communist state that controls loans, interest rates, and all the banking system? It will be a great battle out there when Alibaba enters the U.S market.

Amazon is doing something right with their logistics and service I think, and what customers are looking for is low price and great service, delivered fast. Oops! Did I say low price? That is deflation and we don`t want that, do we?

Reports today:
09:55 a.m EST Revised UoM Consumer Sentiment

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 Commodities, Stock market, Stocks

Tagged as , , ,

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.

 

 

Leave a comment

Filed under Stocks

Tagged as , , , , ,

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.

 

Leave a comment

Filed under Stocks

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

by | February 10, 2014 · 2:24 pm

Gold is up

Gold continue to go up, now trading at 1271,50. Nikkei rose +1,77%. Up 255,93 points. The European markets is mixed today, but are not moving much. The U.S markets ended the week in green on friday. Dow +1,06%, S&P 500 +1,33% and Nasdaq +1,69%. Nokia is up 9,27%. Very good!

I will look for earnings reports from Tata Motors (TTM) today. Forecast EPS is $0,87 ($0,47 last year). The report will be for the fiscal Quarter ending Dec 2013. Many other earnings reports is coming out later this week.

Alibaba is trying to take full control over AutoNavi Holdings (AMAP). The stock is trading at $16,54. Up +7,26%. AutoNavi holdings is up 27,87% AH. EPS growth: -128%. Revenue growth: -6,02%. (Last Qtr).

Take a look a the gold this week. It`s still moving up. Sometimes it goes in the opposite direction of the equity market, and sometimes not. They can follow each other, so don`t forget to set «stop loss» if you are daytrading.

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 Commodities, Stock market, Stocks

Tagged as , , , , , ,