Nov. 11, 2014, 9:03 AM
- As of 8:43 PM Hangzhou time, Alipay had handled over $8B (RMB48.9B) of Singles Day transactions on Alibaba's (NYSE:BABA) marketplaces. Mobile accounted for 42.9% of the total.
- BABA -1.6% premarket. While Alibaba's latest figure suggests its Singles Day GMV is on pace to easily beat initial analyst forecasts of ~RMB50B, expectations grew yesterday following a strong start to China's biggest online shopping day; shares rose 4% on Monday
- Separately, vice chairman Joseph Tsai says Alibaba is open to partnering with Alipay rival PayPal (NASDAQ:EBAY) as it tries to expand its international reach. "If you look at our footprint of being the largest online payment company in China, and PayPal’s position of having a very good international position ... these are some complementary footprints."
- EBAY +0.6%. Alibaba's international sales (skewed towards wholesale business for now) rose 38% Y/Y in calendar Q3, and made up 11% of its total revenue. eBay's upcoming PayPal spinoff has fueled hopes PayPal will be able to strike more deals with companies competing against eBay's Marketplaces ops (such as Alibaba).
Oct. 21, 2014, 2:42 PM
- "Third Point has met with management several times and is confident that Alibaba (BABA +3.8%) can generate long-term value in its core markets and compete in new ones, making it a compelling potential multi-year investment," writes Dan Loeb in his Q3 letter (.pdf).
- Loeb likes how the "substantial network effect" that exists for Alibaba's marketplaces both creates a strong moat and allows the company to obtain "an unrivaled amount of data on Chinese consumers."
- However, it's the "under-appreciated" value of Alibaba's other assets, such as its Alipay stake, the Aliyun cloud infrastructure platform, and the China Smart Logistics JV (48%-owned, handled 38% more packages than UPS in FY14) that intrigue him the most. At current levels, Loeb thinks he's effectively getting free call options on these businesses.
- Following a near-20% gain on his Sony (SNE -0.5%) investment, Loeb decided to bail out. Though approving of Sony's restructuring efforts, he thinks "more urgency will be necessary to definitively turn around the company’s fortunes."
- Loeb has confirmed reports Third Point took a major position in eBay (EBAY +3.3%) in Q3, and says "a meeting with CEO John Donahoe this summer left us impressed by his process-driven approach to optimizing the business."
- He argues the post-split eBay "will offer two appealing growth, relative value, and capital return profiles for investors," sees Marketplaces delivering high-single digits growth, and downplays Apple Pay-related concerns for PayPal on the grounds that Pay is primarily an offline payments solution.
- Like others, Loeb expects an independent PayPal to have more partnership options with tech/Internet giants. He thinks it's only being valued at 11.5x-14.5x 2015E EPS, a range deemed "too cheap for a company growing sales 20% with significant strategic optionality and a strong chance to shape the future of payments."
- Alibaba and eBay have moved higher following the release of Loeb's letter.
Oct. 20, 2014, 7:08 AM
- "It's been an absolute privilege to serve with John, Pierre, and team, and I could not be more proud of what we've accomplished," says Marc Andreesen, taking to Twitter to announce his decision to resign as an EBAY director now that the decision to spin off PayPal has been made.
- eBay's press release
- Shares +0.5% premarket
Oct. 16, 2014, 7:17 AM
- "The Spin is in," says analyst Mark Mahaney, i.e. the PayPal spinoff catalyst has come and gone, and while there is opportunity for the move to unlock value, markets will be in wait-and-see mode until 2015 H2.
- Reason two: Fundamental trends are weaker-than-expected. "Payments segment appears very top-line strong (especially in the key Merchant Services area), but the investments required to drive this growth have been greater than we anticipated. And Marketplace segment growth is clearly deteriorating, and we are concerned that competition may soon become an acceleratingly difficult challenge."
- Third: "We believe that EBAY (both the Payments and Marketplaces segments) is entering what may be a sustained investment period with both material marketing and product development spend. Given rising competitive challenges (Apple Pay, Amazon Same Day Delivery, International marketplace competition), we think these sustained investments are likely the right move. But the uncertain payoffs will likely create a pause for most eBay investors."
- Mahaney downgrades to Sector Perform with price target cut to $55 from $62.
- Cantor lowers its price target to $60 from $63, but holds onto its Buy rating.
- Shares -3.2% premarket
- Previously: eBay issues light Q4 guidance; Marketplaces growth slows
Oct. 15, 2014, 4:33 PM
- EBAY expects Q4 revenue of $4.85B-$4.95B and EPS of $0.88-$0.91, mostly below a consensus of $5.16B and $0.91.
- The company notes the existence of "rapidly changing competitive environments in commerce and payments" - Amazon and Stripe are likely nodding in approval - and says it highlights the value of splitting Marketplaces and PayPal.
- Nonetheless, PayPal's Q3 numbers were healthy. Payments revenue +20% Y/Y (an even growth rate with Q2) to $1.95B ; total payment volume +29% (also even with Q2) to $56.6B.
- PayPal active accounts grew by 4.4M (up from Q2's 4M) to 157M. PayPal Credit +29%. Payments take rate fell to 3.45% from 3.53% in Q2 and 3.7% a year ago.
- Marketplaces was softer: Revenue only +6% (down from Q2's 9%) to $2.16B. GMV +9% to $20.1B, after growing +12% in Q2. U.S. GMV +7%, international +11%. Active buyers rose by 3.4M to 152M.
- PayPal mobile payment volume +72% to $12B; Marketplaces mobile volume +41% to $7B. PayPal is set to process 1B mobile transactions in 2014.
- GAAP opex +17% to $2.18B. Only $8M was spent on buybacks.
- EBAY -3.1% AH. Q3 results, PR.
Oct. 15, 2014, 4:16 PM
Oct. 14, 2014, 5:35 PM
Oct. 13, 2014, 12:53 PM
- Though considering tech stocks "somewhat overvalued," famed VC/PayPal co-founder Peter Thiel thinks the problem pales when compared with a bond/fixed-income bubble "of massive size." (video)
- Thiel: "Tech investors always overrate growth and always underrate durability ... 75%-80% of the value of these companies exists a decade or more in the future ... You can measure growth, but you can't measure durability."
- Thiel also reiterates his view that Alibaba (BABA -0.1%), like other Chinese Internet names, is a political entity. "You're betting on Jack Ma staying in the good graces of the Communist Party."
- He's a fan of the eBay/PayPal (EBAY -1%) split, but disagrees with Carl Icahn's call for PayPal to go on an acquisition spree. "I think mergers only make sense when there are real synergies .. and it's not obvious what the synergy between PayPal and any other business would be at this point."
- GSV Capital (GSVC +1%) might be disappointed to hear Thiel state he thinks "it's going to be a while" before analytics software vendor Palantir (co-founded by Thiel) goes public. Palantir, valued at $9B in a late-2013 funding round, made up 11.2% of GSV's net asset value at the end of Q2.
- A cautious stance is shown towards Bitcoin (COIN, OTCQB:BTCS). "I think it's worked on the level of a currency ... but it's not yet worked on the level of a payments system, and you need to get the payments system to work."
- As data breaches pile up, Thiel expects cybersecurity to remain a big problem - "So much commerce is happening on the Internet and we often have no good intuition of how poor the security is." - that needs to be addressed by software. Cybersecurity plays FireEye (FEYE +3.1%) and CyberArk (CYBR +6.5%) are among the high-beta tech names rallying today.
- Tech ETFs: XLK, VGT, TECL, IYW, ROM, TDIV, TECS, IGM, RYT, QTEC, PSCT, FTEC, FXL, REW, MTK, PTF
Oct. 8, 2014, 12:59 PM
- ChannelAdvisor (ECOM -1.8%) clients selling on Amazon (AMZN +0.1%) saw a 37.9% Y/Y same-store sales increase in September. That figure is down from August's 45.1%, but above that for all but 2 of the last 12 months and still over 2x e-commerce industry growth. 35% of the sales were fulfilled by Amazon, up from 30.2% a year ago.
- eBay (EBAY +1.1%) same-store sales rose 8.9% Y/Y, an improvement from August's 5.9% but still below industry growth. Amazon's share gains and Google algorithm changes continue taking a toll. Auctions -4.1%, fixed-price +7.6%, Motors +14.7%.
- Same-store sales driven by search ads - largely from Google (GOOG -0.4%) - rose 28.5% Y/Y, a sharp increase from August's 13.6%. Clicks +8%, ad prices +1% (pressured by low smartphone ad prices), orders +8%, average order value +15%.
- Google Shopping-related same-store sales rose 45.2% Y/Y, a slowdown from August's 54.3% but still far above industry growth. Average order value rose 33.9%, something ChannelAdvisor attributes to both strong consumer spending and algorithm changes that have led higher-priced goods to be shown more often.
Oct. 1, 2014, 8:03 AM
- Following yesterday's 7.5% gain in eBay (NASDAQ:EBAY) amid the PayPal spinoff announcement, Jefferies, JPMorgan, JMP Securities, and Wedbush all pull their Buy (or Buy equivalent) ratings on the stock.
- "We do not see benefits to the PayPal business from the spin-off and expect some profit leakage to eBay, as well as dis-synergies," says Wedbush's Gil Luria. "Given the more favorable structure to BABA vis-à-vis Alipay, we would expect a commercial agreement between PayPal and eBay to be somewhat less favorable to PayPal compared to the current presentation of the profit split."
- Shares -2.8% premarket
Sep. 30, 2014, 11:02 AM
- Having just appeased one activist (Carl Icahn) by announcing plans to spin off PayPal, eBay (EBAY +6.8%) is now set to contend with another: Dan Loeb's Third Point LLC reportedly has a "significant position" in eBay, and has held talks with outgoing CEO John Donahoe.
- eBay remains sharply higher, albeit off its premarket highs. Street commentary about the spinoff has been positive - Cowen thinks both Marketplaces and PayPal will be better-equipped to deal with rivals as independent companies, and calls Amex's Dan Schulman a "compelling choice" to run PayPal. With Marketplaces making up 27% of PayPal's Q2 transactions, overlap between the businesses is deemed "manageable."
- SunTrust thinks eBay is worth somewhere between $55.72-$88.74/share on a sum-of-the-parts basis. Re/code notes an independent PayPal could have an easier time recruiting talent and battling with upstarts such as Apple and Stripe; the latter has recently scored deals with Facebook and Twitter.
Sep. 30, 2014, 9:11 AM
Sep. 30, 2014, 7:35 AM
Sep. 30, 2014, 7:11 AM
- The deal to create two standalone publicly traded businesses is expected to be completed as a tax-free spinoff in H2 of 2015.
- Devin Wenig, currently president of eBay (NASDAQ:EBAY) Marketplaces, will become CEO of the new eBay company following the separation. AmEx's president of the Enterprise Growth Group Dan Schulman comes over immediately as president of PayPal and will be the CEO of PayPal after the spinoff.
- Neither current CEO John Donahoe nor current CFO Bob Swan will have executive management roles in the two new companies.
- A conference call is set for 11 ET.
- Source: Press Release
- The stock is currently halted from trade.
Sep. 23, 2014, 2:19 PM
- PayPal (EBAY +0.6%) has struck deals with major Bitcoin (COIN, OTCQB:BTCS) payment processors Coinbase, BitPay, and GoCoin to enable Bitcoin payments for digital content through the PayPal Payments Hub. The Payments Hub allows digital content providers to quickly handle payments via PayPal, credit cards, and other payment types.
- Notably, the deal doesn't cover PayPal's own widely-used digital wallet, and also doesn't involve PayPal processing Bitcoin transactions itself. In addition, pre-sales (i.e. payment for a product/service to be delivered later) won't be supported.
- PayPal has taken a relatively cautious approach to Bitcoin, even as a number of major firms (inc. Dell, Expedia, Dish Network, and Newegg) have embraced the virtual currency. However, the company's independently-run Braintree unit threw its weight behind Bitcoin earlier this month.
- Bitcoin prices, under pressure in recent weeks, have rallied thanks to PayPal's move. Coinbase currently shows a bid-ask spread of $427.29-$427.61.
Sep. 15, 2014, 9:39 AM
- Piper Jaffray's Gene Munster views last Friday's reports that Google (GOOG -0.7%) is in talks to buy a stake in eBay (EBAY -0.4%) as largely unsubstantiated and thinks a deal between the two is unlikely despite Google's penchant for making big bets.
- But the analyst goes on to say that if Google were to buy a stake in eBay, he believes it would specifically target PayPal, particularly given Apple’s unique Apple Pay feature on the iPhone 6.
- Munster maintains a Neutral rating and $55 price target on eBay shares.
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