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."
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).
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.
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.
Sprint (S) network infrastructure chief Bob Azzi and product development/operations chief Steve Elfman are leaving the company, as SoftBank (SFTBF, SFTBY) continues shaking up the carrier's executive ranks. Ex-Clearwire CTO John Saw has been named Sprint's chief network officer.
Sprint's sales and marketing chiefs left last October. A possible factor behind the latest moves: Sprint has seen widespread service quality complaints - Consumer Reportsranked it last among U.S. carriers in 2013 - as it moves aggressively to migrate users to its 4G LTE network.
Another potential trigger: Sprint's LTE buildout is slightly behind schedule. The carrier originally planned to offer LTE coverage to 250M POPs by the end of 2013, but later lowered its target to 200M.
"I don’t want to insist on [U.S. mobile] consolidation, but I don’t want to rule it out," says Deutsche Telekom (DTEGY, DTEGF) CEO Tim Hoettges.
The remarks come after Hoettges reportedly told DT's board he considers a sale of 67%-owned T-Mobile USA (TMUS -1.8%) unlikely in the near-term, given regulatory opposition to a bid from Sprint (S -3.6%) and parent SoftBank (SFTBF, SFTBY).
Citing T-Mobile USA's aggressive investments, DT now expects its 2015 free cash flow to only be up "slightly" from 2014 levels. The carrier previously forecast 2015 FCF to rise to €6B ($8.3B) after hitting €4.2B ($5.8B) in 2014.
Sources tell Bloomberg Hoettges is now "taking a long-term view in the U.S.," and is focused on converting more of T-Mobile's giant prepaid base into postpaid subs.
DT shares fell 3.6% in Frankfurt. Both T-Mobile and Sprint are selling off in U.S. trading.
With FCC/DOJ regulators strongly suggesting they'll oppose any attempt by Sprint (S +3.1%) to merge with T-Mobile USA (TMUS +3.6%), SoftBank's (SFTBF, SFTBY) Masayoshi Son "plans to appeal directly to the U.S. business community and policy makers" to convince them the deal would be good for customers, the WSJ reports.
Crucial to Son's effort: Convincing his audience Verizon and AT&T currently have a de facto U.S. mobile duopoly, one that Sprint and T-Mobile can't challenge independently.
Likely to hurt his cause: T-Mobile is now rapidly adding postpaid subs (after losing them for years) with the help of innovative pricing schemes, and regulators reportedly fear a Sprint merger could affect T-Mobile's "maverick" status within the industry.
Sprint and T-Mobile are both outperforming today. Son plans to make a major presentation on March 11 at the Chamber of Commerce in Washington D.C.
Japanese tech/telecom giant SoftBank (SFTBF) has reported a 0.8% passive stake in Zynga (ZNGA +2.9%). Shares of the social game developer have rallied in response, and are close to their 52-week high of $4.97.
SoftBank's empire includes Sprint (80%-owned), a 37% stake in Chinese e-commerce giant Alibaba, and Japan's third-largest mobile carrier.
Deutsche's Brett Feldman has upgraded Sprint (S +1.4%) to Buy following yesterday's Q4 report, albeit while leaving his PT unchanged at $9.25. He cites Sprint's spectrum advantage (presumably a reference to its high-frequency assets following the Clearwire deal), and the carrier's 2-year EBITDA growth outlook.
However, Feldman still expects major subscriber losses in 1H14, followed by "a return to modest growth" once Sprint's Network Vision 4G initiative is finished. He's also skeptical a T-Mobile USA (TMUS +0.4%) deal will happen in light of regulatory concerns.
But while regulators continue signaling their skepticism, SoftBank's (SFTBF) Masayoshi Son appears undeterred in his quest to merge the #3 and #4 U.S. U.S. mobile carriers. Son tells the WSJit would be "a dream within a dream" to challenge Verizon and AT&T without the scale provided by an acquisition. "I can't settle for No. 3 or No.2. It's my personality."
Recent WSJ and Bloomberg reports suggested Sprint/SoftBank are weighing their options in the wake of recent DOJ/FCC comments.
Sprint (S +7.2%) saw a net gain of 682K mobile platform subs in seasonally strong Q4 - 58K postpaid, 322K prepaid, 302K wholesale/affiliate. Though that figure is well below Verizon and T-Mobile's Q4 net adds, and moderately below AT&T's, it represents a turnaround from Q3's 95K net loss (includes a loss 360K postpaid subs).
The #3 U.S. carrier is also guiding for 2014 adjusted EBITDA of $6.5B-$6.7B, up from a 2013 level of $5.4B and a 2012 level of $4.8B. Q4 adjusted EBITDA margin was 14.5%, up from the year-ago period's 10.3%.
Mobile service revenue rose 2% Y/Y to $7.15B, equipment revenue (phone/tablet sales) rose 15% to $1.16B. SG&A spend was nearly flat at $2.44B.
Postpaid ARPU was $64.11, down slightly from $64.24 in Q3 and $64.17 a year ago. Postpaid churn rose to 2.07% from 1.99% in Q3 and 1.98% a year ago.
Sprint's wireline division saw revenue drop 9% to $859M. Its op. income fell to $23M from $71M.
With parent SoftBank (SFTBF) willing to spend aggressively to improve Sprint's 4G coverage, Sprint has set a 2014 capex budget of $8B, up from a 2013 level of $7.5B and a 2012 level of $5.4B.
After rallying yesterday on a report Sprint (S -6.1%) is close to lining up $45B in financing for a T-Mobile USA (TMUS -5.4%) bid, Sprint and T-Mobile are selling off following a Bloomberg report stating FCC/DOJ regulators have "resisted the concept" of a merger between the carriers in preliminary talks with SoftBank's (SFTBF) Masayoshi Son, and that Son and Sprint's Dan Hesse now "plan to decide in the next few weeks whether to move ahead on a bid."
Bloomberg adds Deutsche Telekom (DTEGY) has asked Son to "gauge regulatory sentiment" towards a merger, and that Son and DT's perception of regulatory feedback will "determine their next steps."
In addition, SoftBank and DT are reportedly at odds over the breakup fee for any deal - SoftBank wants a small one on account of regulatory risks, DT feels differently.
FCC and DOJ officials have already suggested they're skeptical about backing a merger between the #3 and #4 U.S. mobile carriers. While Sprint might argue the carriers need to merge to effectively compete against Verizon/AT&T, T-Mobile's recent share gains bring that claim into question.
Sources tell dealReporter Sprint (S +6.5%) is close to obtaining $45B in financing for a T-Mobile USA (TMUS +3.9%) bid. Both Sprint and T-Mobile shares have spiked higher in response.
The WSJpreviously reported Sprint has received proposals from at least two banks for a bid that would value T-Mobile's equity at $31B. In addition to the financing needed to acquire Deutsche Telekom's (DTEGY) 67% T-Mobile equity stake, Sprint and parent SoftBank (SFTBF) will need funds to cover (and potentially refinance) T-Mobile's $20B debt load.
The report comes as DOJ/FCC officials continue taking a skeptical view of a deal that stands to reduce the number of nationwide U.S. carriers to three.
The WSJ reports Sprint (S) CEO Dan Hesse and SoftBank (SFTBF, SFTBY) chief Masayoshi Son met DOJ officials this month regarding a possible T-Mobile USA (TMUS) bid, and were told a deal would be viewed "with skepticism."
The paper adds SoftBank and T-Mobile USA parent Deutsche Telekom (DTEGY, DTEGF) have been talking about a deal, but are still "working through remaining issues" such as the size of the deal's breakup fee (Son reportedly is pushing for a small one) and whether Sprint or T-Mobile's brand would be retained.
Both the DOJ and FCC have been expected to show intense scrutiny of a merger that would lower the number of nationwide U.S. carriers to three, and feature a carrier that has been upending the U.S. mobile industry with new promotions and pricing schemes.
During a Bloomberg TV interview, outspoken T-Mobile USA (TMUS -0.1%) CEO John Legere provided fresh hints his firm is open to merging with Sprint (S +6.5%).
Legere: "We all need better scale and capability ... The question starts to be: How do you take the maverick and supercharge it? We either need more spectrum and capability and a lot more investment, or we need consolidation."
Sprint and parent SoftBank (SFTBF, SFTBY) have been widely reported to be lining up financing to acquire Deutsche Telekom's (DTEGF, DTEGY) 67% T-Mobile USA stake. But regulators might object to a tie-up, particularly given T-Mobile's efforts to shake up the U.S. mobile industry via aggressive/novel pricing schemes.
Separately, Sprint announces it has expanded its 4G LTE network to cover 40 more markets, including Milwaukee and Salt Lake City. Sprint, which is trying to neutralize Verizon and AT&T's LTE coverage leads, now offers LTE in 340 markets.