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Oct. 2, 2015, 12:13 PM
- Hammered over the last several months as macro concerns and plunging local markets took a toll, U.S.-traded Chinese tech stocks are up strongly (CQQQ +3.2%) today even as the Nasdaq and S&P post modest declines.
- Web/mobile stocks posting big gains include giants Alibaba (BABA +5.3%) and Baidu (BIDU +4.5%), with the former naturally taking Yahoo (YHOO +4%) higher with it. Yahoo rose earlier this week after stating it's still pushing ahead with a spinoff of its 384M-share Alibaba stake.
- Other gainers include Vipshop (VIPS +6.6%), SouFun (SFUN +6.2%), Qihoo (QIHU +6.7%), Youku (YOKU +5.8%), Jumei (JMEI +8%), Bitauto (BITA +5.3%), Weibo (WB +5.9%), Jumei (JMEI +8%), and Cheetah Mobile (CMCM +6.6%). Online travel leaders Ctrip and Qunar are also up big, possibly aided by new efforts from Beijing to boost Macau tourism.
- Solar winners include Yingli (YGE +4.1%), ReneSola (SOL +5.6%), and Daqo (DQ +9.4%).
- ETFs: KWEB, QQQC, EMQQ
Sep. 28, 2015, 5:43 PM
Sep. 28, 2015, 5:37 PM
- Yahoo (NASDAQ:YHOO) discloses its board recently authorized the company to continue pursuing the spinoff of its 384M-share Alibaba stake, in spite of the IRS' recent decision not to grant a private letter ruling stating the spinoff satisfies its active trade or business (ATB) requirement. It still aims to finish the transaction in Q4.
- Yahoo cautions the spinoff is still "subject to certain other conditions, including final approval by Yahoo's Board of Directors, receipt of a legal opinion with respect to the tax-free treatment of the transaction under U.S. federal tax laws and regulations, the effectiveness of an applicable registration statement filed with [the SEC] and compliance with the requirements under the Investment Company Act of 1940, and other customary conditions." The company notes an IRS official recently stated new guidance planned for tax-free spinoffs won't apply to transactions that occur before the guidance is issued.
- Shares are up 3.1% after hours to $28.45, after falling 5.3% in regular trading amid a market rout.
Sep. 21, 2015, 12:46 PM
- Though Alibaba is down 1.8% following its lockup expiration, Yahoo (YHOO +1.1%) is higher after an IRS official stated his agency's recent decision not to grant Yahoo's request for a private letter ruling declaring the company's planned Alibaba stake spinoff meets its active trade or business (ATB) requirement isn't "a description of future guidance" (though he thinks it will lead to future guidance), and that "nothing in [the] notice affects an immediate retroactive date."
- FBR's William Bird (Outperform rating) calls the remarks "incrementally positive" for Yahoo. "The notice was characterized as a transitional 'stop gap' to explain the IRS’ thinking behind the no-rules, under which the IRS does not want to pass judgment on a transaction while it is studying the rules. We believe the IRS’ statements take one risk off the table (i.e. retroactive treatment of potential new rules), though anything shy of a definitive tax ruling on YHOO falls short of fully resolving tax uncertainties."
- Previously: Yahoo reportedly weighing options following IRS decision
Sep. 21, 2015, 6:24 AM
- The lockup on 63% of Alibaba (NYSE:BABA) shares ended on Saturday, freeing up the company's largest shareholders to start selling stock beginning today.
- With Yahoo (NASDAQ:YHOO) still working out what to do with its 15% stake amid tax uncertainties, investors battered by the e-commerce company's $128.5B market slump are bracing for the worst, such as more shares hitting the market and driving prices even lower.
- Billionaire founder Jack Ma and Vice Chairman Joseph Tsai have pledged to keep their stock, while analysts expect SoftBank (OTCPK:SFTBY) to hold onto its shares.
Sep. 14, 2015, 2:54 PM
- Alibaba (BABA -3.3%) has sold off after Barron's published a lengthy bearish piece questioning the Chinese e-commerce giant's valuation, growth outlook, corporate governance, non-core investments, and user metrics. Yahoo (YHOO -2.9%), whose 384M-share Alibaba stake is now worth $24B, is along for the ride.
- Alibaba SVP Jim Wilkinson published a lengthy rebuttal to Barron's' column, Among other things, he questioned the logic of comparing Alibaba's valuation to eBay's, noted Alibaba derives the lion's share of its revenue from wholly-owned subsidiaries rather than oft-criticized variable-interest entities (VIEs), and took issue with the numbers cited for average U.S. e-commerce spending and Alibaba's average annual user spend.
- SunTrust's Bob Peck is also defending Alibaba. He estimates Alibaba's average customer spent $1,150 on its site last year, less than the $1,600 spent by the average U.S. shopper. Barron's, suggesting Alibaba's numbers were questionable, indicated the average Alibaba shopper spent 26% more than the average U.S. online shopper.
- Peck also argues Jack Ma's 2011 decision (criticized by Barron's) to transfer ownership of Alipay to a private partnership controlled by Ma was necessary due to Chinese banking regulations. Alibaba is currently entitled to 37.5% of Alipay parent Ant Financial's pre-IPO profits, and a 37.5% equity stake at IPO time.
Sep. 11, 2015, 1:14 PM
- Top Yahoo (YHOO -0.1%) media exec/chief marketing officer Kathy Savitt is leaving the company to become the digital content chief of upstart studio STX Entertainment. Savitt was originally hired in 2012, shortly after Marissa Mayer became CEO, and was put in charge of "media and editorial functions" in early 2014, following COO Henrique de Castro's firing.
- Just before the news broke, Kara Swisher reported Savitt could be out, and that her "continued tenure has been the topic of much discussion inside Yahoo for a while." Recent executive departures include North American ad sales chief Kevin Gentzel, ad/data platform SVP Scott Burke, and senior international exec Dawn Airey.
- During the Mayer era, Yahoo has tried to grow its media profile (and fend off a long list of share-gaining competitors) by investing in video content and hiring well-known names such as Katie Couric and David Pogue. Display ad sales rose 3% Y/Y in Q2 to $407M.
Sep. 9, 2015, 9:48 AM
- CNBC's David Faber reports Yahoo (YHOO - unchanged) is "still focused on moving ahead" with its Alibaba stake spinoff after the IRS denied the company's request for a favorable private letter ruling (PLR) that would've paved the way for a tax-free spinoff. However, he adds Yahoo is also considering a spinoff of its core business and Yahoo Japan (OTCPK:YAHOY) stake, and will decide in the next few weeks.
- Several firms have cut their targets in response to the IRS decision. Cantor's Youssef Squali (Buy, target cut to $45 from $56) now puts the odds of a tax-free spinoff at 50/50. "While the IRS also indicated that it wasn't ruling adversely on the [tax-free spinoff] request, we view this as a black eye for the Yahoo team considering that it is the architect of this much-anticipated transaction. It also biases the outcome of this decision more negatively in the mind of investors, in our view."
- Nomura: "We believe the likelihood of a positive tax outcome for the company diminishes as more time passes; this remains the core overhang on Yahoo's valuation." Evercore's Ken Sena (Hold, $38 target) argues the lack of either a favorable PLR or an IRS ruling on whether the spinoff will be taxable "[moves] the case into uncharted territory historically."
- Yahoo is now near breakeven; the Nasdaq is up 0.7%. With shares trading near $31 as of yesterday's close, some tax concerns were already priced in.
- Update (10:55AM ET): Yahoo is now up 1.1%. Helping out: Alibaba is up 4.4%.
Sep. 8, 2015, 4:55 PM
- The IRS has notified Yahoo's (NASDAQ:YHOO) lawyers it isn't granting the company's request for a ruling declaring the company's planned 384M-share tax-free Alibaba (NYSE:BABA) stake spinoff meets its active trade or business (ATB) requirement. Yahoo has withdrawn its request for a ruling.
- Yahoo: "At the same time, the IRS indicated that it had not concluded that the proposed spin-off transaction was taxable and therefore was not ruling adversely on the request ... Work proceeds on the pending Aabaco spin-off plan. Yahoo’s Board of Directors will continue to carefully consider the Company’s options, including proceeding with the spin-off transaction on the basis of an opinion of counsel."
- Yahoo has fallen to $29.53 after hours. Alibaba is up 0.4% to $61.15, after falling 4.7% in regular trading in the wake of cautious remarks on calendar Q3 GMV growth. Yahoo fell in May after an IRS official's remarks about active business requirements for a spinoff stoked fears of an unfavorable ruling. The company has said it would attach its small business service unit to the spinoff in order to meet ATB requirements.
Sep. 8, 2015, 1:09 PM
- During a Citi conference talk (webcast), Alibaba (BABA -1.8%) IR chief Jane Penner provided cautious remarks about FQ2 (calendar Q3) GMV growth, and noted expectations have recently been lowered.
- Up as much as 4.5% this morning as markets rallied, Alibaba has turned negative over the last hour. Yahoo (YHOO - unchanged) is nearly flat after previously rising as much as 3.5%.
- Alibaba's Chinese marketplace GMV rose 34% Y/Y in FQ1 (36% excluding a Chinese online lottery suspension), a slowdown from FQ4's 40% and FQ3's 49%. Concerns about the impact of slowing Chinese GDP growth have been running high.
- Citi is defending Alibaba, arguing Penner's remarks have been taken out of context and that she qualified them by adding expectations haven't changed in a dramatic way.
- YTD, Alibaba is down 40%. Shares now trade for 18x an FY17 (ends March '17) EPS consensus of $3.40. FY16 and FY17 revenue growth consensus estimates are respectively at 26.1% and 31.1%.
- Update (4:04PM ET): Alibaba has closed down 4.7%, and Yahoo down 2.2%. Reuters has provided more details on Penner's remarks. Alibaba now expects FQ2 GMV to be lower by a mid-single digit % relative to prior forecasts, and sees growth for the international AliExpress marketplace to slow to a low-double digit clip due to Russian and Brazilian forex pressures.
Sep. 1, 2015, 6:23 AM
- Yahoo's (NASDAQ:YHOO) chief executive, Marissa Mayer, is expecting twin daughters in December, but plans to work throughout her pregnancy.
- "Since this is a unique time in Yahoo’s transformation, I plan to approach the pregnancy and delivery as I did with my son three years ago, taking limited time away and working throughout," she wrote in a Tumblr post.
- Mayer’s pregnancy comes as Yahoo prepares to spin off its stake in Alibaba, which is expected to occur in the fourth quarter.
- YHOO -2.4% premarket
Aug. 24, 2015, 8:03 AM
- Tech stocks in the U.S. are sharply lower in early action after the sector fell just as hard as broad market averages in China and Japan. Tech heavyweights aren't getting spared amid the carnage.
- Google (NASDAQ:GOOG) -4.1% premarket to $587.31.
- Apple (NASDAQ:AAPL) -5.1% to $100.38.
- Microsoft (NASDAQ:MSFT) -3.9% to $41.41.
- Facebook (NASDAQ:FB) -3.4% to $83.05.
- Yahoo (NASDAQ:YHOO) -6.6% to $30.75 and Alibaba (NYSE:BABA) is down 8.7% to $62.26 as concerns over growth in China mount.
- The Nasdaq 100 futures contract is off 4.8%.
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Aug. 13, 2015, 9:12 AM
- Believing shares nearly price in worst-case scenarios on multiple fronts, Bernstein's Carlos Kirjner has upgraded Yahoo (NASDAQ:YHOO) to Outperform a day after shares sold off in response to Alibaba's post-earnings decline. His target is $52.
- Likewise, UBS' Eric Sheridan (Buy rating, target cut by $6 to $51) thinks markets are no assigning little to no chance of tax-efficient Alibaba and Yahoo Japan stake spinoffs, which in turn leads him to declare the current risk/reward "compelling."
- YHOO +1.4% premarket to $34.98. Shares made a new 52-week low of $33.85 yesterday.
- Update (12:28PM ET): Yahoo is now up 4.9%, thanks in part to the fact Alibaba is up 3.2%.
Aug. 12, 2015, 9:24 AM
- Alibaba (BABA - down 5.8%) beat FQ1 EPS estimates and announced a $4B buyback, but missed revenue estimates and reported Chinese retail marketplace GMV growth slowed to 34% Y/Y (36% excluding an online lottery suspension) from FQ4's 40% and FQ3's 49%. In addition, the company's monetization/take rate for Chinese marketplaces fell 19 bps Y/Y to 2.33%, thanks to a mix shift towards mobile (2.16% take rate, up 67 bps Y/Y).
- Yahoo (NASDAQ:YHOO) has slumped to $34.16 premarket. Alibaba and Yahoo also both sold off yesterday amid a market correction that followed the yuan's devaluation.
- Yahoo's 384M-share Alibaba stake is currently worth $27.9B; the company will officially be free to sell Alibaba shares on Sep. 19. Yahoo continues to push ahead with its plans to spin off the Alibaba stake into a separate, publicly-traded, company in Q4 (pending IRS approval).
Aug. 12, 2015, 9:13 AM
Aug. 3, 2015, 3:58 PM
- Re/code reports Yahoo (YHOO -0.1%) paid $200M in cash to buy social apparel product discovery/shopping site Polyvore, plus up to $40M in employee retention payouts. Bloomberg reports Yahoo paid $230M after factoring $40M in retention payments.
- Yahoo announced the Polyvore acquisition last Friday, without giving a price. Re/code notes Polyvore had ~9M U.S. unique visitors in June (per comScore), up 36% Y/Y.
- Thanks in part to its Alibaba IPO windfall, Yahoo had $7B in cash/investments at the end of Q2, and $1.2B in debt.
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