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Dec. 24, 2013, 1:33 PM
- The Nikkei reports SoftBank (SFTBF, SFTBY) is "in the final stages of talks" with Deutsche Telekom (DTEGY, DTEGF) regarding a deal in which 78%-owned Sprint (S -0.2%) would acquire Deutsche's 67% stake in T-Mobile USA (TMUS +1%). Sources add the deal could happen as soon as next spring, and could be worth more than ¥2T ($19.2B).
- A ¥2T price tag for Deutsche's T-Mobile USA stake would translate into a $28.7B valuation for the #4 U.S. mobile carrier. T-Mobile USA, whose shares have risen sharply thanks to Sprint M&A rumors, currently has a market cap of $25.5B.
- SoftBank CEO Masayoshi Son has reportedly been busy lining up financing for a T-Mobile USA bid, which is bound to be intensely scrutinized by regulators. Reuters has reported Dish (DISH +1.1%) is also thinking of bidding for T-Mobile, and wouldn't stand idly if Sprint made a move.
Dec. 20, 2013, 4:20 PM
- Bloomberg has joined the WSJ in reporting Sprint (S +6.7%) is trying to obtain financing for a T-Mobile USA (TMUS +4.7%) bid from six banks, and provides additional details.
- Bloomberg's sources indicate SoftBank (SFTBF) CEO Masayoshi Son has personally talked with banks about obtaining ~$20B in financing. His goal: To buy Deutsche Telekom's (DTEGY) 67% stake in T-Mobile in an all-cash deal.
- At the same time, Sprint's management is said to be "reluctant" to deal with integrating Sprint and T-Mobile's incompatible 3G networks; Sprint uses the EV-DO air interface, while T-Mobile uses W-CDMA/HSPA. But with SoftBank owning 78% of Sprint, their objections may be rendered moot.
- Also: With regulatory approval of a Sprint/T-Mobile deal far from certain, Son reportedly wants to avoid agreeing to a large breakup fee. AT&T had to pay a $7B breakup fee to T-Mobile two years ago.
- Separately, T-Mobile has scheduled a Jan. 8 CES event where it will reveal the fourth part of its "un-carrier" strategy. Part one involved the elimination of phone subsidies and contracts in favor of monthly phone installment plans; part two involved the launch of T-Mobile's Jump smartphone upgrade plans; and part three brought cheap global data roaming and international talk/text plans.
Dec. 13, 2013, 4:41 PM
- Sources tell the WSJ Sprint (S +4.3%) is "studying regulatory concerns" related to a T-Mobile USA (TMUS +8.2%) bid, and that SoftBank (SFTBF) founder/CEO Masayoshi Son is "driving" the effort. However, they caution Sprint hasn't yet decided whether to make a move.
- Deutsche Telekom (DTEGY), which retains a 67% stake in T-Mobile USA, is said to be "looking to possibly exit the U.S. market." Though Deutsche is currently prohibited from selling T-Mobile shares until 18 months have passed from the closing of the MetroPCS deal, it can sell earlier if it received an offer for the entire stake.
- Sprint and T-Mobile only have 53M postpaid subs between them, less than Verizon's 95M and AT&T's 72M. If they try to go through with a merger, they'll mention such figures to regulators early and often.
- But the FCC and DOJ, only two years removed from thwarting AT&T's bid for T-Mobile, haven't given any indication they're now comfortable seeing further consolidation among nationwide U.S. carriers.
- Previous: Sprint reportedly working on deal with T-Mobile
Dec. 13, 2013, 4:01 PM
- The WSJ reports Sprint (S +5%) could make a bid for T-Mobile USA (TMUS +7.8%) in 1H14. Both Sprint and T-Mobile shares have spiked in response.
- The FCC would doubtlessly give close scrutiny to a deal that would reduce the number of nationwide U.S. carriers to three from four. But Sprint majority owner SoftBank (SFTBF) hasn't been scared to make big bets.
- Both Sprint and T-Mobile's wireless subscriber bases are considerably smaller than Verizon and AT&T's, particularly with regards to corporate users. Sprint may be betting regulators will allow a deal to go through for this reason.
Dec. 3, 2013, 1:25 PM
- Sources tell Light Reading Sprint (S -1.4%), at SoftBank's (SFTBF) prodding, is preparing to move its HQ from Overland Park, KS (a Kansas City suburb) to California (no word on exactly where in the state).
- The site points out SoftBank has been "trying to move some Japanese executives to the U.S." since it bought a 78% stake in the #3 U.S. mobile carrier earlier this year, and that California is "a shorter commute" for SoftBank execs than Kansas.
- One Sprint employee talking to Light Reading says he hasn't heard of any plans for an HQ move, but does say SoftBank has taken far more of a hands-on approach with Sprint than was expected, and that there's "a lot of internal [and] operational auditing going on that's making employees nervous."
- SoftBank and Sprint have already announced plans to open a Silicon Valley office that would employ as many as 1K workers.
Nov. 21, 2013, 11:39 AM
Nov. 11, 2013, 4:01 PM
- On China's biggest annual online shopping day (Singles Day), Alibaba handled RMB35B ($5.7B) worth of transactions, easily topping the company's $5B forecast. Alibaba's 2012 transaction level of $3.1B was passed at 1:04PM local time.
- Mobile sales rose over 5x Y/Y, and account for 21% of this year's transactions.
- Investors in 24% Alibaba owner Yahoo (YHOO +2.1%) appear happy with this year's performance. So do investors in 35% owner SoftBank (SFTBF, SFTBY), whose shares rose 1.9% overnight in Tokyo.
- Local e-commerce firm Dangdang (DANG +10.8%) has received a big lift from Singles Day optimism. Peer Vipshop (VIPS -2.1%), which is about to report, hasn't been so lucky. Oppenheimer has cut shares to Hold, citing lofty multiples following a big 2013 run-up. LightInTheBox (LITB -0.4%), which had its PT lowered by Oppenheimer, has closed down slightly.
Oct. 21, 2013, 2:35 PM
- In a move that could pave the way for a U.S. IPO, Alibaba has received approval from the NYSE (NYX, ICE) and Nasdaq (NDAQ) to maintain management/founder control of its board, should it list on one of the exchanges. Hong Kong's unwillingness to agree to the same had led the Chinese e-commerce giant to pursue a U.S. listing.
- Alibaba, whose Q2 numbers were released last week by 24% shareholder Yahoo (YHOO +1.8%), will likely have a $100B+ IPO valuation, given the current multiples being assigned to U.S. and Chinese Internet names. That means its offering could exceed Facebook's in size, and will easily dwarf Twitter's.
Oct. 18, 2013, 12:29 PM
- SoftBank (SFTBF.PK +0.3%) invests $1.26B in mobile device/accessories distributor Brightstar, valuing the company at an enterprise value of $2.2B. In conjunction, the Softbank, Sprint, and Brightstar Buying & Innovation Group joint venture will become a division of Brightstar.
- The investment aims to be a pricing power win-win as Brightstar becomes the exclusive provider of handsets, accessories, and services to certain SoftBank telco affiliates. Brightstar plans to purchase over $20B in devices/accessories. The move could reduce procurement expenses at Sprint (S -1.5%), in which SoftBank owns an 80% stake.
- Over the next 5 years, based on certain contingencies, SoftBank's ownership will accrete to 70%, from 57% today. Brightstar founder Marcelo Claure holds the remaining 43% of the company.
- Previous: SoftBank acquires 51% stake in Supercell for $1.5B
Oct. 15, 2013, 9:50 AM
- SoftBank (SFTBF.PK -0.2%) acquires a 51% stake in Finnish online game company Supercell for ~$1.5B, DealBook reports. The game maker will use proceeds to expand in Asian countries, including Japan and South Korea.
- Supercell intends to utilize SoftBank's "strategic resources [to] help us deliver our games to hundreds of millions of new consumers all over the globe," said founder Ilkka Paananen.
- Japanese game maker GungHo Online Entertainment, which is partially owned by SoftBank and already collaborates with Supercell, will invest $300M, or 20%, of the stake.
- SoftBank is aiming to gain a larger foothold in the mobile gaming market, which stands to benefit from enormous data usage tailwinds. Supercell's Clash of Clans and Hay Day are reportedly generating $2.4M in revenue a day.
Oct. 11, 2013, 4:06 AM
- Alibaba reportedly intends to carry out its IPO in 2014, although there is a smaller chance that it could file for a listing before the year-end.
- The speculation comes after Alibaba decided not to go public in Hong Kong, due to authorities not allowing the e-commerce giant to retain a structure that would enable its "partners" - a group of founders and senior employees - to maintain control of the board's composition.
- Previous reports have said Alibaba, whose shareholders include Yahoo (YHOO) and Softbank (SFTBF.PK), is moving towards a U.S. IPO.
- Meanwhile, Alibaba has reportedly provided most of the funding in a $206M round for ShopRunner, which competes with Amazon by offering an unlimited two-day shipping service from retailers for a yearly fee of $79. Under the deal, eBay (EBAY) sold its 30% stake at a profit.
Oct. 10, 2013, 6:48 AM
- Alibaba Group has decided not to list in Hong Kong, CEO Jonathan Lu has told Reuters, as authorities "need time to study" a structure that would allow the Internet giant's "partners" - a group of founders and senior employees - to maintain control of the board's composition. In other words, the authorities won't allow it.
- However, Alibaba hasn't decided on which exchange it will list - it has been speculated that the company will IPO in the U.S.
- Any flotation could raise an estimated HK$100B ($12.9B) and value Alibaba at up to $120B. That would be a boon to Yahoo (YHOO) and Softbank (SFTBF), which own 24% and 35% respectively.
Oct. 1, 2013, 12:56 PM
- SoftBank (SFTBF.PK) founder Masayoshi Son on Sprint (S +2.3%): "It takes time to get devices ready and prepare services and the network ... At the very least you need half a year or a year. And for anything substantial you need one or two years."
- Sprint investors are hoping Son can work some of the magic he worked in Japan, where a share-losing/also-ran Vodafone unit was transformed into a major share-gainer following its acquisition by SoftBank.
- However, many on the Street are on edge over recent share losses, Sprint's new (aggressively priced) service plans, and heavy 4G capex. After talking with management, New Street Research's Jonathan Chaplin recently forecast Sprint will lose 1.2M subs in 2014; he previously estimated the carrier would add 100K.
- Yesterday: Kantar's June-August smartphone sales estimates
Sep. 30, 2013, 12:14 PM
- A banking source tells BI's Nicholas Carlson the banks working on Alibaba's IPO want the Chinese e-commerce giant to go public at a $100B valuation.
- If current valuations for high-growth Internet names hold up, there's a good chance Alibaba will end up being worth more than $100B. The company had Q1 revenue of $1.38B (+71% Y/Y) and net income of $669M. Facebook, currently worth $125B, had revenue of $1.81B (+53% Y/Y) and net income of $488M in its blowout Q2.
- Yahoo (YHOO), which rallied last week (I, II) thanks to Alibaba-related news, is near breakeven after opening lower. Citi raised its PT to $39 from $31 this morning, citing a higher valuation for the Alibaba stake and improving search trends.
- The firm now thinks Alibaba can deliver 2014 revenue of $10B and net income of $4.3B (up from a prior $9.7B and $4B), and believes Yahoo will be able to at least partly sell its 24% stake (valued at $16/share) in a "tax-efficient" manner.
- Citi also observes comScore estimates Yahoo saw 22% Y/Y search paid click growth in August. Yahoo, whose search revenue per query has long trailed Google's, saw 21% paid click growth in Q2, partly offset by an 8% drop in cost per click.
Sep. 27, 2013, 9:42 AM
- In a move that brings Alibaba one more step closer to a U.S.IPO filing, 24% shareholder Yahoo (YHOO +1.2%) and 36.7% shareholder SoftBank (SFTBF.PK) have given their blessing to a corporate structure that would allow its 28 partners (largely founders and management) to maintain firm control of the Chinese e-commerce giant's board (and which didn't sit well with Hong Kong regulators).
- Alibaba vice chairman Joe Tsai has written a blog post defending his company's planned partnership structure. Echoing arguments made by Google and Facebook regarding their dual-class share structures, Tsai asserts tight partner control will "help maintain the Alibaba culture."
- Yahoo is outperforming following the news. SoftBank rose 1.6% overnight in Tokyo.
- Yesterday: Yahoo rallies as Alibaba IPO reportedly draws closer
Sep. 26, 2013, 12:58 PM
- With Alibaba apparently set to list in the U.S. following a breakdown in talks with Hong Kong regulators, 24% owner Yahoo (YHOO +4.6%) is adding to its 2013 gains, and in doing so hitting levels last seen in '07.
- Reuters reports Alibaba "has engaged U.S. law firms to start working on its IPO and will soon be hiring banks to manage the listing."
- Alibaba's very strong Q1 numbers, together with the huge rallies seen this year in high-growth Chinese and U.S. Internet names, has fueled hopes of a post-IPO valuation soundly above $100B.
- 36.7% Alibaba owner SoftBank (SFTBF.PK) rose 4% overnight in Tokyo.
- Previous: ABR assigns Alibaba a $100B post-IPO valuation
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