May 19, 2014, 11:59 AM
- Yahoo Japan (YAHOF) has abandoned its plan to acquire Japanese mobile/broadband services firm eAccess from SoftBank (SFTBF) for $3.2B (previous). Instead, the company will launch a low-cost mobile broadband service using eAccess' network.
- The eAccess deal was part of an effort by SoftBank, which owns 42.6% of Yahoo Japan, to restructure its assets and raise funds for M&A (including a possible Sprint/T-Mobile merger). But the company is already raising ¥300B in debt, and stands to reap a post-IPO windfall from its 34.4% stake in Alibaba.
- Yahoo (YHOO +0.6%) owns 35% of Yahoo Japan, whose shares fell 2.8% in Tokyo overnight. At current levels, Yahoo's stake is worth $8.1B. Yahoo Japan's sales fell 14% Y/Y in Q4 to $1.03B, and its net income 11% to $304M.
May 11, 2014, 2:09 AM
- Deutsche Telekom (DTEGF) wants Sprint (S) to agree to a breakup fee of over $1B in the event that regulators block the latter's possible acquisition of T-Mobile US (TMUS), the WSJ reports.
- The German carrier also wants Sprint to pledge to keep the T-Mobile brand and some of its management.
- Deutsche Telekom's demands come after regulators implied they would view any Sprint/T-Mobile tie-up skeptically. Three years ago, Deutsche received $3B when authorities blocked the sale of T-Mobile to AT&T.
- The sides are working on forging a deal in the near term, but could wait until after a government auction of wireless airwaves - which is expected in 2015 - or under a different White House administration.
- The operators might have a bit more clarity next week, when the FCC is due to decide on how much spectrum carriers can hold and the rules for the spectrum auction.
May 7, 2014, 8:04 AM
- Bloomberg reports Alibaba (ABABA) is looking to sell a 12% stake through its IPO. At a $150B valuation, that would imply raising $18B; at a $200B valuation, $24B.
- A big selloff in momentum stocks (inc. Chinese Internet companies) might lead to some downward pressure on Alibaba's multiples. At $200B, the company would be worth 92x 2013 adjusted net income of $2.16B - forward multiples might be considerably lower.
- Meanwhile, though Yahoo (YHOO) is required to sell a chunk of its 22.6% stake at IPO time, SoftBank (SFTBF) says it won't sell any part of its 34.4% stake, in spite of its big investments in Sprint and $3.2B deal to buy Japanese broadband provider eAccess. Shares fell 5.1% overnight in Tokyo.
- There's some disappointment over the fact Alibaba didn't break out details for its Taobao and Tmall sites. Would-be investors are also keen to learn more about how Alibaba plans to grow its international sales (8.8% of 2013 revenue), an effort bound to put the company on a collision course with Amazon and eBay.
- Yesterday: Alibaba files for IPO, shows off big numbers
- Alibaba's prospectus
May 7, 2014, 7:39 AM
- Among the leading decliners was SoftBank (SFTBF), -5.1% as investors sold the news on the Alibaba offering. Exporters tanked as well, with a 2.9% fall in Honda and 3.4% decline in Panasonic pacing those slides.
- ETFs: DXJ, EWJ, DFJ, NKY, DBJP, EZJ, EWV, SCJ, DXJS, JPNL, JSC, ITF, JPP, JPNS, HEWJ, FJP, DXJH, DXJF, DXJT, DXJC, DXJR
May 6, 2014, 5:00 PM
- Alibaba (ABABA) has released its long-anticipated F-1. No trading symbol has been proposed yet, and the company nominally says it's looking to raise up to $1B (it'll almost certainly raise more). The IPO underwriters: Credit Suisse, Deutsche, Goldman, JPMorgan, Morgan Stanley, and Citi.
- Alibaba had 2013 revenue of $5.55B (+73% Y/Y), net income of $1.35B, and adjusted net income of $2.16B. Gross margin was 71.9%. R&D spend totaled $604M, sales/marketing spend $581M, and G&A spend $465M.
- The company claims an annual gross merchandise volume (GMV) of $248B on the back of 11.3B orders, 231M active buyers, and 8M active sellers.Q4 GMV rose 53% Y/Y to RMB529B, with mobile accounting for 19.7% of the total. Mobile MAUs amount to 136M.
- Chinese commerce accounted for $4.69B of the company's 2013 revenue. International commerce accounted for $669M, cloud services $105M, and everything else $87M.
- Founder Jack Ma owns 8.9% of shares going into the IPO. SoftBank (SFTBF) owns 34.4%, and Yahoo (YHOO) 22.6%.
- Yahoo investors are taking the F-1 release in stride. Shares -0.3% AH.
Apr. 30, 2014, 6:03 PM
- Bloomberg reports Sprint (S) "plans to push forward" with a T-Mobile USA (TMUS) bid after lining up financing from six banks.
- SoftBank's (SFTBF) Masayoshi Son is expected to "make a formal bid in June or July," according to one source. SoftBank is still reportedly talking to T-Mobile parent Deutsche Telekom (DTEGF) about who would run the post-merger company; outspoken T-Mobile chief John Legere is the top candidate.
- While past reports have suggested financing will be available - Sprint is expected to absorb T-Mobile's $8.7B in net debt in the event of a deal - DOJ officials are apparently quite skeptical about the merits of a deal to merge the #3 and #4 U.S. mobile carriers.
- Son has previously argued he would launch a massive price war if a Sprint/T-Mobile deal was cleared, and would also offer competitive home broadband services (could be easier said than done in high-density urban areas).
- Sprint announced yesterday it lost 333K postpaid subs in Q1. T-Mobile, which reports tomorrow, has been faring better lately.
Apr. 25, 2014, 3:35 AM
- Alibaba (ABABA) is considering expanding its IPO to over $20B, which would make it the largest listing in U.S. history, the WSJ reports.
- The offering would be above the $19.7B that Visa raised in 2010 and could even top the world record $22.1B that Agricultural Bank of China attracted in Shanghai and Hong Kong in 2010. Until now, figures of $15-16B have been bandied about for Alibaba's IPO.
- Under the plan being discussed, Alibaba would sell shares in addition to its investors, which include Yahoo (YHOO). Another major shareholder, Softbank (SFTBF), is not planning to sell shares in the deal.
- "Alibaba is at the point where, after the extreme growth they've had, they're going to need capital to make another huge push forward," says investment adviser Paul Boyd.
Apr. 16, 2014, 4:08 AM
- Alibaba Group (ABABA) could file the prospectus for its U.S. IPO on Monday, Reuters reports, adding that the listing could be worth over $16B.
- The report comes after major shareholder Yahoo (YHOO) disclosed that Alibaba's Q4 net income surged 110% to $1.35B as revenue jumped 66% to $3.06B.
- Alibaba's results helped Yahoo's shares climb 6.8% in AH trading. In Tokyo, shares in SoftBank (SFTBF), which owns 37% in Alibaba, jumped 8.5%.
Apr. 7, 2014, 10:45 AM
- With all signs suggesting U.S. regulators remain opposed to a Sprint/T-Mobile USA merger in spite of Masayoshi Son's PR campaign, rumors have emerged SoftBank (SFTBF) will turn its sights on acquiring Vodafone (VOD +0.9%) if its efforts to fuse the #3 and #4 U.S. carriers are thwarted.
- It's worth noting Vodafone ($96B market cap) would be much harder for SoftBank ($87B) to digest than T-Mobile ($26B). If it was to try, SoftBank would doubtlessly make use of its 37% stake in soon-to-be-public Alibaba (could have a $50B+ pre-tax value).
- Sprint (S -2.6%) and T-Mobile (TMUS -1.5%) are seeing moderate declines.
Mar. 27, 2014, 11:52 AM
- SoftBank's (SFTBF) $3.17B sale of Japanese mobile ISP eAccess to Yahoo Japan is fueling speculation the Sprint (S +3.6%) parent is raising funds for a T-Mobile USA (TMUS +1.4%) bid.
- In spite of regulatory pushback, SoftBank's Masayoshi Son continues to press his case for a deal. "A duopoly is taking over our country," he declared today at an industry trade show. "if you look at [the past] five years … it is a fact that those two big companies increased [their market share] from 56% to 73%. What happens in the next five years?"
- T-Mobile's recent share gains (following years of losses) might have regulators thinking the next five years could go differently than the last five. The ripple effects of the #4 carrier's aggressive pricing might also influence their thinking.
- Son has promised he'd launch a "price war" if a Sprint/T-Mobile deal was approved, and that the merged carrier would act as a last-mile broadband rival to cable/phone duopolies - that could be easier said than done in densely-populated urban areas.
Mar. 27, 2014, 5:05 AM
- Yahoo Japan (YAHOF) has agreed to acquire mobile and broadband provider eAccess from SoftBank (SFTBF) for ¥324B yen ($3.17B) in a deal that will expand the Internet portal's services for tablets and smartphones.
- SoftBank, which owns 42.5% in Yahoo Japan, will book a special gain of ¥55.7B for the fiscal year ending March 2015. Yahoo (YHOO) owns 35% in its Japanese namesake. (PR)
Mar. 17, 2014, 9:12 AM
- Yahoo's (YHOO) gains are in response to Alibaba's (ABABA) confirmation it plans to do a U.S. IPO.
- At a $140B valuation, Yahoo's 24% stake would have a pre-tax value of $33.6B.
- Over in Tokyo, SoftBank (SFTBF) rose 4.9% overnight. At a $140B valuation, its 36.7% stake in Alibaba would have a pre-tax value of $51.4B.
Mar. 16, 2014, 3:56 AM
- Alibaba has confirmed reports that it intends to carry out an IPO in New York - and not in Hong Kong - as it looks to become a "more global" and transparent company.
- The Internet giant could reportedly raise over $15B in the offering, which would make it biggest U.S. IPO ever by a Chinese company. Analysts reckon that the firm's market cap could top $130B.
- Alibaba hasn't decided which exchange it will list on, nor on a date.
- Credit Suisse, Deutsche Bank, Goldman Sachs and JPMorgan will play major roles in the IPO, while Citigroup will have a smaller part.
- Alibaba said that it might consider listing its shares in China in the future, although it didn't provide details.
- Alibaba investors Yahoo (YHOO) and Softbank (SFTBF) should be in line for a healthy bonanza from the IPO.
- The WSJ provides a primer on Alibaba's busines model, calling the company a "a mix of Amazon, eBay and PayPal with a dash of Google thrown in." Alibaba also has "some uniquely Chinese characteristics."
- ETF: IPO (PR)
Mar. 13, 2014, 4:05 AM
- Alibaba is "95% certain" to carry out its much anticipated IPO in New York rather than in Hong Kong, the FT writes, adding to previous reports that the Chinese e-commerce behemoth will float in the U.S.
- Listing in New York would allow Alibaba to create a dual-class structure of stocks that would enable its founders and senior managers to retain their tight grip on the company. Hong Kong doesn't provide such an option, although it's mulling a change in rules.
- Either way, the IPO is set to be one of the largest on record and should provide a large bonanza to Alibaba investors Yahoo (YHOO) and Softbank (SFTBF).
Mar. 11, 2014, 10:47 AM
- Ahead of a big speech at the U.S. Chamber of Commerce, SoftBank's (SFTBF, SFTBY) Masayoshi Son is promising a "massive price war" if skeptical regulators allow Sprint (S +0.7%) to merge with T-Mobile USA (TMUS +2.4%).
- As expected, Son also insists Sprint and T-Mobile, who between them have a giant portfolio of high-frequency spectrum assets, could act as a credible last-mile broadband rival to phone/cable duopolies if they joined forces.
- AT&T (T -0.8%) and Verizon (VZ -0.6%) are ticking lower, while Sprint and T-Mobile are up moderately. AT&T has already been cutting prices to counter T-Mobile's aggressive moves - moves that have contributed to FCC/DOJ doubts about the merits of a Sprint/T-Mobile deal.
- Verizon, for now, is refusing to take part in a price war, and betting its service quality and unmatched 4G coverage will lead its pospaid subs to continue paying a premium.
- Yesterday: U.S. mobile roundup
Mar. 10, 2014, 2:54 PM
- AT&T (T -0.3%), which unflinchingly stuck with a premium pricing strategy for years, has announced yet another price cut for its Mobile Share plans (previous), as it tries to fend off a share-gaining Verizon and a resurgent T-Mobile.
- The price of Ma Bell's low-end 2GB Mobile Share plan has been cut by $15/month. The base price for a single user is now $40/month; adding a smartphone via AT&T's Next upgrade plan adds $25/month to the bill. Opting for a traditional phone subsidy/contract instead of Next costs $40/month.
- T-Mobile (TMUS +0.3%) , meanwhile, has simultaneously increased its data allotments for cheaper postpaid plans - a $50/month plan featuring unlimited voice/text now provides 1GB of data, up from 500MB - and hiked the price of its unlimited data offering by $10 to $80/month.
- Verizon (VZ -0.5%), which has offered some minor price cuts and promotions lately, insists it won't depart from its premium pricing strategy. CFO Fran Shammo: "We’re not going to buy customers ... You have to earn customers." Shammo also reiterates Verizon's support for subsidies (and with them, service contracts), and says the carrier will take a cautious approach to installment plans.
- Bloomberg reports SoftBank's (SFTBF, SFTBY) Masayoshi Son, facing regulatory opposition to his plans for a Sprint (S +0.4%) bid for T-Mobile, will shift from arguing a merger is needed combat Verizon/AT&T to arguing a deal will allow Sprint/T-Mobile to act as a last-mile broadband alternative to phone/cable duopolies. Son is due to make a speech tomorrow.
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