Sep. 12, 2014, 5:12 PM
- Yahoo (NASDAQ:YHOO) climbed 3.9% today to close at its highest level since Jan. 2006 and has now gained 8.3% since Sept. 5, when reports of the timing and pricing of the Alibaba IPO surfaced.
- YHOO, which owns a ~23% stake in Alibaba, is expected to sell 140M of the shares in the IPO next week, which should net ~$8.8B in proceeds to the company, according to Cantor Fitzgerald.
- But there's also potential danger for YHOO: Alibaba is widely known to have been the main reason why many YHOO investors have held on to their shares, and some analysts say much of YHOO’s value is based on Alibaba.
Sep. 12, 2014, 8:10 AM
- Two Mexican companies, Worldwide Directories and Ideas Interactivas, have sued Yahoo (NASDAQ:YHOO) and law firm Baker & McKenzie, alleging that they enlisted the help of a senior Mexican judge and other court personnel to avoid a $2.7B judgment issued by a Mexican court in 2012.
- The two companies originally sued Yahoo over an online search project in 2011, saying the tech company breached its duties by terminating agreements prematurely. The lawsuit resulted in a $2.7B preliminary judgment.
- Worldwide Directories and Ideas Interactivas now claim that Yahoo and Baker & McKenzie engineered a conspiracy to reduced that award to $172,500. A Yahoo spokeswoman calls the lawsuit "meritless."
Sep. 11, 2014, 7:15 PM
- The U.S. government threatened to slap fines of $250K/day against Yahoo (NASDAQ:YHOO) in 2008 if the company didn't comply with a demand to hand over user data, according to the Washington Post.
- The report provides details from documents unsealed today showing an ultimately unsuccessful legal battle by YHOO to resist the government's demands.
- The documents show how federal officials forced U.S. tech companies to participate in the National Security Agency's PRISM surveillance program.
Sep. 10, 2014, 10:40 PM
- The guessing game has started over which U.S. companies Alibaba (Pending:BABA) might pursue after it becomes flush with IPO cash.
- If Alibaba's borrowing power is factored in, estimates for its total spending capacity range as high as $50B.
- Lion's Gate (NYSE:LGF), Red Hat (NYSE:RHT), and Akamai Technologies (NASDAQ:AKAM) have all been bantered around as potential targets.
- Though a long shot, the case for Yahoo (NASDAQ:YHOO) being in the mix is also intriguing. There's $12B in tax savings generated from Alibaba buying Yahoo - instead of Yahoo selling off its post-IPO stake in the Chinese company and paying the tax bill.
- Alibaba debuts on the NYSE on September 19.
Sep. 8, 2014, 3:54 PM
- In what may be the first coverage of Alibaba (Pending:BABA), Atlantic Equities' James Cordwell - expecting the company to continue to gobble up share - rates the stock Overweight with $100 price target (current IPO price range is $60-$66).
- The biggest risk to the outlook, he says, is Alibaba not owning fulfillment centers. It's an approach that has worked well so far, says Cordwell, "but that could become a weakness as competitors extend their in-house capabilities.”
- As for Yahoo (YHOO +5.4%), Cantor's Youssef Squali says the company should end up with about $8.8B in gross proceeds and $5.7B net (though tax treatment could increase this amount) after selling 140M shares of its 523.6M share stake in Alibaba. He's got a Buy rating and $39 price target on Yahoo, but thinks the Alibaba IPO could boost the stock to $49.
Sep. 5, 2014, 7:04 PM
- Yahoo (NASDAQ:YHOO) is adding to its Friday gains in response to Alibaba's setting of an $60-$66 IPO price range that spells a $147.9B-$162.7B valuation range, which in turn gives Yahoo's 523.6M-share stake a $33B pre-tax valuation at the midpoint.
- Of interest: While Yahoo can be required to sell 140M shares at IPO time (down from a prior 208M, thanks to a recent deal amendment), Alibaba's prospectus only states Yahoo is selling 121.7M through the offering, thereby leaving it with a 16.3% post-IPO stake.
- If 140M shares are sold, Yahoo stands to reap pre-tax proceeds of $8.8B at the midpoint; if 121.7M are sold, proceeds total $7.7B. Yahoo has already promised to return at least half the post-tax proceeds to shareholders.
- Given huge investor interest, there's a healthy chance Alibaba will hike its price range before the IPO, which will reportedly arrive on Sep. 19.
Sep. 5, 2014, 4:05 PM
- Alibaba (Pending:BABA) has set a $60-$66 IPO price range. That spells a valuation range of $147.9B-$162.7B. The company is looking to offer 320.1M shares - 123.1M new shares, and 197M on behalf of existing holders. At the midpoint of the range, proceeds from the new shares would total $7.7B. (prospectus)
- Yahoo (YHOO +1%) is obligated to sell up to 140M Alibaba shares at IPO time. At the midpoint, that would spell proceeds of $8.8B. Its total stake would be valued at $33B pre-tax, and SoftBank's (OTCPK:SFTBF, OTCPK:SFTBY) at $50.2B. Yahoo has moved higher on the news.
- Earlier: Alibaba to reportedly start trading on Sep. 19
Sep. 5, 2014, 11:57 AM
- CNBC reports Alibaba (Pending:BABA) will price its IPO on Thursday, Sep. 18, and begin trading the next day. That fits with recent reports from the WSJ and NYT.
- The NYT reports today Alibaba's roadshow will start in NYC on Monday. No word yet on the price/valuation range sought by the Chinese e-commerce giant - plenty of analysts have assigned valuations above $150B.
- Yahoo (YHOO +1%) has ticked higher following the report.
- Related tickers: OTCPK:SFTBF, OTCPK:SFTBY
Aug. 27, 2014, 1:12 PM
- With its Q2 results disclosed, Alibaba (Pending:BABA) is expected to provide an IPO price range "as soon as Tuesday," the NYT reports.
- After setting a price range, Alibaba will reportedly kick off a 2-week roadshow (covering both Asia and the U.S.) ahead of an IPO the company hopes will take place during the week of Sep. 15.
- Sources caution the Chinese e-commerce giant's plans could still change. The NYT previously reported Alibaba was planning an IPO "sometime after Labor Day." At one point, the company was rumored to be eying an early-August IPO.
- Yahoo (YHOO +0.7%) continues to trade modestly higher.
Aug. 27, 2014, 9:52 AM
- In a revised F-1, Alibaba (Pending:BABA) discloses it had calendar Q2 revenue of $2.54B (+46% Y/Y), and net income of $1.99B (boosted by $1.1B in interest/investment income). Op. income was $1.1B (+27% Y/Y). Revenue growth accelerated from Q1's 39% clip, a figure that had disappointed some investors.
- Q2 free cash flow was $1.71B. Sales/marketing spend +70% Y/Y to $195M; R&D +68% to $315M.
- GMV was RMB501B ($81.6B), +17% Q/Q and +45% Y/Y (46% growth was seen in Q1). Mobile accounted for 32.8% of GMV (up from Q1's 27.4%), and mobile revenue more than doubled Q/Q to $400M.
- Annual orders +14% Q/Q to 14.5B; annual active buyers +9% to 279M; annual active sellers +11% to 8.5M; mobile monthly active users (MAUs) +15% to 188M.
- Alibaba's Taobao marketplace (focused on smaller merchants) had a Q2 GMV of RMB342B, +33% Y/Y. The Tmall marketplace (focused on larger merchants) had a GMV of RMB159B, +81%.
- Yahoo (YHOO +0.3%) is up slightly following Alibaba's release, which might be the company's last earnings update before its IPO.
- Related tickers: OTCPK:SFTBF, OTCPK:SFTBY
Aug. 12, 2014, 5:15 PM
- In a new F-1, Alibaba (Pending:BABA) discloses it has restructured its agreement with Chinese online payments giant Alipay and its parent, Small and Micro Financial Services.
- Most notably, Alibaba will receive a 37.5% stake in Small and Micro/Alipay in the event of an IPO featuring a $25B+ valuation and $2B+ in gross proceeds. The deal is contingent on Alibaba's stake in Small and Micro not having reached 33% at IPO time. Previously, Alibaba's Alipay IPO payout was capped at $6B.
- In the meantime, Alibaba will receive 37.5% of Small and Micro's pre-tax income in exchange for IP licensing and "software technology services." Its profit payout will be reduced in proportion to the equity stake it obtains in Small and Micro.
- Alibaba is also selling assets related to its loan business for small/mid-sized companies (SMEs) to to Small and Micro for $518M, and entering into "software system use and service agreements" related to the SME loan business in exchange for an annual fee. From 2015-2017, the fee will be 2.5% of the average daily book balance for micro loans.
- Yahoo (NASDAQ:YHOO) is up 0.8% AH.
- Related tickers: OTCPK:SFTBF, OTCPK:SFTBY
Aug. 9, 2014, 8:38 PM
- "Many [online] advertisers now care more about who sees their ads than where they appear," writes the Columbia Journalism Review's Steven Waldman in a column about the threat posed to Web publishers by programmatic (automated) ad buying.
- Whereas a drug developer might have previously bought ads on popular health sites to reach potential customers, it can now use programmatic campaigns to reach them across the Web, aided by cookies that track when a user has shown an interest in particular drugs (or something related to them).
- The upshot? Advertisers are less likely to pay a big premium for inventory on high-profile sites. Waldman: "A marketer can now reach 'New York Times readers' without ever actually advertising in The New York Times, and for less money."
- Publishers are responding in part by embracing native ad formats such as sponsored content. But as Waldman observes, a site's image can get hurt when users conflate sponsored and organic material. "Publishers have ended up trading the one thing they had left—their credibility with readers—for a few scraps of CPM."
- Yahoo (NASDAQ:YHOO), increasingly using native ads to complement traditional display ads, saw a 24% Y/Y drop in display ad prices in Q2 to go with a 24% increase in ads sold. AOL, both a publisher and a programmatic ad tech provider, fared a little better in Q2.
- eMarketer expects U.S. real-time bidding ad spend (a key part of the programmatic market) to rise to $9B in 2017 from $3.4B in 2013. At the same time, it observes many advertisers are treading cautiously for now.
- Other Web publishers: IACI, DMD, TTGT, GKNT, WBMD
- Ad tech firms with programmatic exposure: CRTO, FUEL, RUBI, MRIN, TRMR, YUME, TUBE
Jul. 23, 2014, 9:40 PM
- After talking with an unnamed "large Yahoo shareholder that is preparing a presentation" featuring a similar thesis, fund manager Eric Jackson thinks there's a good chance Alibaba (Pending:BABA) or SoftBank (OTCPK:SFTBF) will acquire Yahoo (YHOO +3.3%).
- His reasoning: Whereas the value of Yahoo's stakes in Alibaba and Yahoo Japan (OTCPK:YAHOF) are currently discounted for future tax payments, the pre-tax valuations are what matter to Alibaba and SoftBank. The former would be buying back a 22.5% pre-IPO stake in itself, and the latter would be adding to its respective 34.3% and 43% stakes in Alibaba and YJ.
- Jackson estimates Yahoo's assets are worth $56/share to either acquirer - he values the post-IPO Alibaba stake at $33, the YJ stake at $9, and Yahoo's core business at $5, and adds $9 for cash (inc. IPO share sales).
- He speculates Alibaba (were it the buyer) could trade the YJ stake to SoftBank for part of its Alibaba stake (adding to the scope of its buyback), and notes new SoftBank Internet/media chief Nikesh Arora reportedly wanted to buy Yahoo while at Google.
- One caveat: Acquiring Yahoo would give SoftBank a 56.8% stake in Alibaba before factoring IPO dilution. The Chinese government likely wouldn't be pleased with that. Jackson suggests SoftBank could trade part of its Alibaba stake post-acquisition for "something of similar value," but doesn't say what.
- Previous: Alibaba reportedly planning September IPO
Jul. 21, 2014, 5:01 PM
- Yahoo (NASDAQ:YHOO) has confirmed its purchase of mobile analytics platform/ad network owner Flurry, but hasn't disclosed a price. Flurry has also issued a statement.
- Yahoo: "Our combined scale will accelerate revenue growth for thousands of developers and publishers across the mobile ecosystem. Our combined offerings will enable more effective mobile advertising solutions for brands seeking to reach their audiences and gain unique insights across desktop and mobile."
- The company also promises Flurry's offerings (i.e. its data and analytics tools) will help "make Yahoo mobile experiences better through products that are more personalized and more inspiring."
- TechCrunch (citing sources) states the deal's price "could be anywhere between $300 million and $1 billion." One source suggests Flurry was looking for $700M-$800M. Re/code has only reported the price is in the "hundreds of millions."
- 170K developers use Flurry Analytics, but for now, only 8K publishers "monetize" using Flurry's ad solutions, which face competition from Google, Twitter (MoPub), Millennial Media , and many others. The addition of Yahoo's own apps to Flurry's ad network would significantly increase its scale.
- Millennial rallied (MM +2.7%) after reports of the deal broke, as investors hope it, too, will become an M&A target.
- Earlier: Yahoo reportedly buying Flurry
- Update: A source tells the WSJ Yahoo is paying more than $200M.
Jul. 21, 2014, 3:19 PM
- Re/code reports Yahoo (YHOO -0.3%) is acquiring Flurry, a top provider of analytics and ad services for mobile advertisers and publishers. The purchase price is said to be in the "hundreds of millions."
- Flurry claims access to data from 540K apps and 5.5B daily app sessions. Publishers use its analytics services to track user activity and app performance, and to create audience profiles that can improve user acquisition.
- In addition, Flurry has launched a mobile ad network that (with the help of its user data and audience profiles) allows brands/agencies to buy ad inventory provided by developer partners.
- The company was on a $100M net revenue run-rate as of last September. CEO Simon Khalaf suggested an IPO was only a matter of time.
- Acquiring Flurry would provide Yahoo with mountains of mobile app/user data, and bolster its efforts to offset weak PC display ad sales with mobile growth. Marissa Mayer stated last week Yahoo's mobile search and display ad sales both more than doubled in Q2, but didn't give specific numbers.
- Last year, Facebook bought Onavo, another prominent mobile analytics startup.
- Update: Yahoo has confirmed the acquisition, but hasn't given a price.
Jul. 17, 2014, 11:40 AM
- The NYT reports Alibaba (Pending:BABA) now plans to price its IPO "sometime after Labor Day."
- Though past reports stated Alibaba is aiming for an early-August offering, the company needs more time to take care of several issues, including wrapping up an SEC review, deciding on its IPO valuation range, and finalizing roadshow presentation plans.
- Yahoo (YHOO -1.4%) is adding to yesterday's post-earnings losses amid a broader tech selloff. The company is 2 days removed from disclosing it has lowered the number of Alibaba shares it's required to sell at IPO time by 33%, and plans to return at least half the proceeds to shareholders.
- Per Alibaba's latest F-1, Yahoo owns 22.5% of the Chinese e-commerce giant, and SoftBank (OTCPK:SFTBF) 34.3%.
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