Feb. 25, 2014, 5:35 PM| 4 Comments
Feb. 14, 2014, 5:04 PM
- In addition to establishing a BlackBerry position, Dan Loeb's Third Point LLC took a 600K-share stake in Baidu (BIDU), a 7.6M-share stake in T-Mobile USA (TMUS) and a 1M-share stake in NXP (NXPI) during Q4. At current levels, the positions are respectively worth $100M, $237M, and $56M. NXPI +1% AH.
- On the other hand, Loeb unloaded the 4.4M-share Tibco (TIBX) position he had at the end of Q3. There were hopes Loeb would use his Tibco stake to push for a spinoff of the company's faster-growing Business Optimization unit. TIBX -1.7% AH.
- Loeb also cut his remaining Yahoo (YHOO) position in half to 8M shares. Third Point once had a 60M-share stake in Yahoo, before striking a deal last August to sell 40M shares back to the company and leave its board.
- Third Point's 13F
Jan. 28, 2014, 1:00 PM
- Chinese Internet stocks, crushed over the last few trading days amid SEC-related concerns and a general rout in tech momentum plays, are rebounding sharply today in tandem with other high-beta tech stocks.
- Possibly helping: The SEC has settled a dispute with Deloitte over its request for documents related to Longtop Financial, a Deloitte-audited Chinese firm suspected of accounting fraud. The settlement, which comes after the SEC received a "substantial volume" of requested docs, is fueling hopes the SEC's auditing ban on the Chinese arms of the big-4 accounting firms (including Deloitte) will be revoked, and a final resolution between U.S. and Chinese regulators achieved.
- Also: Morgan Stanley is calling the selloff a buying opportunity, and has picked five names it's a fan of - Baidu (BIDU +2.8%), YY (YY +14.5%), New Oriental (EDU +2.8%), Dangdang (DANG +6.8%), and Ctrip (CTRP +5.2%)..
- MS expects Baidu's margins (recently pressured by huge investments) to stabilize later this year with the help of accelerating sales growth; it's pleased with Ctrip's willingness to sacrifice near-term margins for share gains; it think Dangdang's e-commerce strategy is yielding margin improvement and better fulfillment efficiency; and it's a fan of YY's "sticky" user base and monetization potential (less than 2% of users are currently monetized).
- Major gainers include Sungy Mobile (GOMO +11.3%), 500.com (WBAI +18.3%), ChinaCache (CCIH +9.8%), Vipshop (VIPS +10%), Bitauto (BITA +9.5%), and Qunar Baidu-controlled (QUNR +8.8%).
Jan. 27, 2014, 12:44 PM
- U.S. and Chinese Internet stocks are adding to last week's big losses, as investors continue taking profits following major 2013 gains. Chinese stocks were hit last week by an emerging markets selloff, weak PMI data, and an SEC ban (pending appeal) on audits from the Chinese units of big-4 U.S. accounting firms.
- Twitter (TWTR -8.2%), the company bears are most likely to point to when arguing a new Internet stock bubble has formed, is headlining the U.S. decliners. Shares are still up 25% from their post-IPO opening trade of $45.10.
- Other U.S. decliners: GOOG -3.1%. FB -2.9%. YELP -5.3%. Z -5.1%. LNKD -4.3%. P -3.2%. ANGI -4.1%. ZNGA -3.1%. GRPN -3.1%.
- Chinese decliners: BIDU -2.9%. CCIH -19%. BITA -14.6%. CTRP -7.4%. NQ -7.9%. LONG -9.4%. DANG -7.3%. SOHU -4.3%. GOMO -5.8%. SINA -3.3%. QUNR -7.7%. SFUN -5.4%. WBAI -7.5%. RENN -5%.
- Internet/social media ETFs: FDN, PNQI, SOCL
Jan. 24, 2014, 10:59 AM
- Five months after Baidu (BIDU -0.4%) acquired a 59% stake in Chinese daily deals/group-buying site Nuomi from Renren (RENN +2.2%) for $160M, Renren says it has reached a deal to sell its remaining stake in Nuomi to Baidu. Terms are undisclosed. (PR)
- Following Baidu's initial purchase, Nuomi's CEO wrote a memo stating his company is looking to eventually go public. The company has been estimated to hold an 11.6% share of the Chinese group-buying market (#4 overall).
- Nuomi is just one of several acquisitions Baidu has made over the last two years to grow the reach of its Web/mobile empire.
Jan. 23, 2014, 9:59 AM
- SEC administrative law judge Cameron Elliot has barred the Chinese units of the Big-4 accounting firms - KPMG, Deloitte, PwC, and Ernst & Young - from auditing U.S.-listed companies for six months.
- Elliot declares the accounting firms "willfully" chose to withhold audit work papers from U.S. regulators for Chinese companies being investigated for accounted fraud. The firms have been worried about violating Chinese privacy laws by turning over the papers, and have argued the dispute needs to be resolved politically.
- Though the firms plan to appeal and say they can continue serving Chinese clients for now, shares of Chinese Web and solar names aren't handling the news well. Soft Chinese PMI data could be worsening matters.
- Chinese Web decliners: BIDU -2.5%. SOHU -3.2%. DANG -8.9%. SFUN -8.5%. PWRD -8.5%. QUNR -7.1%. LITB -6.5%. YY -6.1%. WUBA -6%. BITA -5.4%. EJ -5.9%. SINA -4.6%. LITB -6.5%. CTRP -5.4%. NQ -7.1%.
- Chinese solar decliners: TSL -8.7%. JASO -6.9%. SOL -6.3%. JKS -5.6%. CSIQ -5.4%. DQ -4.6%. YGE -5.6%. CSUN -6.2%. HSOL -7.8%.
- Qihoo (QIHU -4.6%) has joined the selloff in spite of a BrightWire report stating Alibaba (ABABA) has reached a deal to acquire a stake in the company. Marbridge Consulting reported two weeks ago Qihoo and Alibaba were in talks about a possible investment.
Jan. 10, 2014, 9:44 AM
- Microsoft (MSFT +1.2%) has been upgraded to Overweight by Jefferies. The upgrade follows a moderate drop caused by disappointment Alan Mulally is no longer a CEO candidate.
- BlackBerry (BBRY +1.1%) has been upgraded to Sector Perform by RBC. Shares have already seen a big run-up since the company's FQ3 report.
- Baidu (BIDU +1.3%) has been upgraded to Buy by Maxim.
- Micron (MU +0.2%) has been upgraded to Buy by Jefferson Research, and started at Buy by Argus and Sterne Agee. The moves come two days after shares blasted off in response to a very strong FQ1 report (I, II).
- Splunk (SPLK -2.1%) has been cut to Equal Weight by Barclays. The downgrade shortly follows a UBS upgrade to Buy. SA Pro contributor ZNCapital recently took aim at Splunk's valuation.
- Ambarella (AMBA -1.8%) has been cut to Hold by Deutsche. Needham cut the chipmaker to Hold two days ago.
- Marvell (MRVL +1.9%) has been started at Buy by MKM.
- Qlik (QLIK +2.1%) has been upgraded to Buy by Jefferies.
Jan. 9, 2014, 10:44 AM
- China's iResearch estimates Qihoo (QIHU -6.5%) has only a 14.4% Chinese search share (translation). That's well below the 22.4% estimated by frequently-referenced CNZZ, as well as Qihoo's own numbers; the company stated on its Q3 CC (transcript) it believes its Chinese search share is "comfortable above 20%."
- An iResearch analyst suggests CNZZ's reliance on traffic data from small/medium-sized sites provides it with an incomplete picture of Chinese search trends. iResearch claims to analyze data from 3K+ sites (including large ones) and 1K+ apps.
- If iResearch's figure is reasonably accurate, it would be a positive for Baidu (BIDU -0.2%). Most of the share gains Qihoo has seen since launching its search engine in the summer of 2012 have come at Baidu's expense. CNZZ estimates Baidu had a 63.1% search share in December (-860 bps Y/Y).
- Qihoo is giving back a majority of the gains it saw yesterday following an Alibaba investment rumor. The company has said it's aiming to have a 30% search share by the end of 2014.
Jan. 2, 2014, 2:55 PM
- After receiving a $42K fine from China's National Copyright Administration for providing access to pirated material, Baidu (BIDU +1.5%) has agreed to filter pirated movies and TV shows from its services.
- Chinese online video leader Youku (YOKU +4.3%), which has invested heavily on building a library of legally-distributed content (content costs totaled 56% of the company's Q3 revenue), is up sharply.
- Baidu's widely-used video player has turned into a top source for pirated material. Youku, along with several peers and copyright agencies, sued Baidu in November for allegedly enabling piracy through a variety of products/services.
- At the same time, Baidu's PPS and iQiyi sites have joined rivals in licensing and distributing professional content.
Dec. 27, 2013, 1:21 PM
- Making good on a November Marbridge Consulting report, Baidu (BIDU +4.1%) has reached a deal to acquire Perfect World's (PWRD +1.8%) Huanxiang Zongheng online literature business (provides Chinese e-books, digital comics, and animations) for RMB191.5M ($31.5M). (PR)
- Marbridge previously noted Zongheng offers 100K+ e-book titles, receives 60M+ daily page views, and gets over 1/3 of its site traffic via mobile.
- The purchase is the latest in a string of 2013 acquisitions by Baidu, as the Chinese search giant attempts to create a far-reaching empire of Web/mobile content and services. Prior acquisitions: PPS, 91 Wireless, Nuomi.
- Perfect World says the deal will allow it to focus on its core online gaming business. The company has been investing heavily in both developing new games and promoting existing ones.
Dec. 10, 2013, 12:49 PM
- Pac Crest (Outperform) says its Chinese checks indicate Baidu's (BIDU +3.9%) Q4 trends are stable, at the company's growth rate can match that of the Chinese search market going forward.
- Though shares have risen sharply this year thanks to improved ad monetization (particularly on mobile) and a general rally in Chinese Internet stocks, concerns about search share losses to Qihoo (QIHU +1.4%) and (to a lesser extent) Sohu's (SOHU +2%) Sogou unit have persisted.
- Research firm CNZZ estimates Baidu had a 61.7% Chinese search share in October, down from 73.5% a year earlier. Over the same time, Qihoo's share surged to 21.4% from 9.8%, and Sogou's rose to 10.5% from 7.5%.
Nov. 21, 2013, 7:04 PM
- A source close to Baidu (BIDU) tells Marbridge Consulting the Chinese search giant is close to buying Chinese literature/comics/animation site Huanxiang Zongheng, a unit of online gaming firm Perfect World (PWRD). The source adds more info about the deal will be released on Nov. 26.
- Zongheng offers 100K+ online book titles, and receives 60M+ daily page views. It also offers iOS, Android, and Windows Phone apps, and gets over 1/3 of its site traffic via mobile.
- Baidu has stepped up its M&A activity this year, as it tries to evolve into a broader, Google-like provider of Internet services and apps. The company has already bought video site PPS and top Android app store 91 Wireless, and a 59% stake in daily deals site Nuomi.
Nov. 13, 2013, 3:49 PM
- Six days after dropping in the face of Twitter's strong debut, high-flying Internet names are rallying in the wake of Chinese microblogging leader Sina's Q3 beat and strong Q4 guidance.
- The day has also seen a dismal IPO from online textbook rental leader Chegg, a WSJ report of a rejected $3B+ Facebook offer for Snapchat, and a vague afternoon rumor about M&A interest in Trulia from Realogy.
- U.S. standouts: ZNGA +7.4%. LNKD +4.8%. P +3.3%. ANGI +2.6%. GSVC +4.1% (owns a Chegg stake).
- Chinese standouts: QIHU +8.9%. SFUN +7.5%. LITB +6.4%. YY +6.9%. CYOU +6.3%. QUNR +5.7%. CTRP +3.7%.
- Baidu (BIDU +1.4%) is up moderately following news Chinese online video rivals Sohu (SOHU +1.7%) and Youku (YOKU +3%) have joined the MPAA and various entertainment/media companies in suing it for piracy. The assorted parties accuse Baidu of enabling piracy through its video search engine, as well as through video player apps and a TV dongle.
- The suit comes as Baidu ramps its content spending for its iQiyi and PPS video sites.
Nov. 7, 2013, 11:48 AM
- Even as Twitter blasts off to a $25B valuation following its much-hyped IPO, U.S. and foreign Internet stocks are giving back some more of the massive 2013 gains that have led many names to trade at steep multiples.
- One sign investors in this space are in a profit-taking mood: Zillow (Z -4.3%) and YY both sold off yesterday in spite of delivering Q3 beats (I, II) and above-consensus guidance; Zillow is adding to its losses today. Likewise, SouFun (SFUN -5.4%) has turned negative after providing a Q3 beat and strong guidance.
- Notable U.S. decliners: FB -2.4%. LNKD -2.8%. GRPN -4.7% (reports after the close). ZNGA -2.7%. P -3.8%. TRLA -5.4%.
- Notable foreign decliners: BIDU -2.4%. QIHU -6.7%. SINA -5% (generally viewed as the Chinese Twitter). DANG -6.2%. VIPS -7.7%. RENN -4.2%. AMAP -4.7%. CTRP -5.7%. YOKU -5.6%. RENN -4.2%. YNDX -5.1%. MELI -2.4% (plunged yesterday thanks to a Q3 miss). SIFY -2.6%.
- Internet/social media ETFs: FDN, PNQI, SOCL
Nov. 1, 2013, 11:12 AM
- After pricing its 11.1M-share IPO at $15 (above an elevated price range of $12-$14), Qunar (QUNR) opened at $28.35 and is now at $32.30, up 115.3%. That gives the Chinese online travel site a valuation of $3.64B, which in turn means Baidu's (BIDU) 58.8% post-IPO stake is worth $2.14B.
- For reference, Qunar had 2012 sales of just $81.7M, and 1H13 sales of $58.5M (+75% Y/Y).
- Rivals Ctrip (CTRP +1.2%) and eLong (LONG +1.7%) are trading higher.
- F-1, IPO preview
Oct. 30, 2013, 9:13 AM
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