Fri, Oct. 2, 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
Mon, Sep. 28, 5:43 PM
Mon, Sep. 28, 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.
Mon, Sep. 14, 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.
Tue, Sep. 8, 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.
Tue, Sep. 8, 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.
Mon, Aug. 24, 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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Wed, Aug. 12, 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).
Wed, Aug. 12, 9:13 AM
Wed, Jul. 8, 10:47 PM
- Yahoo (YHOO -2.6%) is jumping into the daily fantasy sports arena, a potentially lucrative field that is getting more crowded as big media firms pick out partners.
- The company launched its site to host daily and weekly games where fans assemble rosters and earn points based on game performance in those short-term competitions.
- An estimated 57M participants in the U.S. and Canada average spending $465 a year on fees and materials related to the short-term fantasy games, Ipsos says. That adds up to about $2.6B in entry fees, and potentially hundreds of millions in revenue for Yahoo.
- The space is dominated now by FanDuel and DraftKings -- the former of which has major investments from Comcast as well as KKR and Shamrock Ventures, and the latter with its own millions in venture funding and a relationship with ESPN. Both companies have been valued at $1B.
- Yahoo's not starting from scratch, though: Daily games are dependent on quick and voluminous data, which the company has been offering sports fans for years.
- Press release
- Previously: Blistering pace of growth at FanDuel (Jan. 13 2015)
Tue, Jul. 7, 11:08 AM
- Though not seeing the 10%+ declines witnessed by many U.S.-traded Chinese tech peers, Alibaba (NYSE:BABA) and Baidu (NASDAQ:BIDU) are down sharply following fresh overnight losses for the Shanghai and Shenzhen exchanges.
- Yahoo (NASDAQ:YHOO), whose 384M-share Alibaba stake is currently worth $29.4B, is once more following in Alibaba's footsteps. The Nasdaq is down 1.5%.
- Alibaba has made fresh post-IPO lows. Baidu is less than $7 away from a 52-week low of $176.69. Alibaba now trades for 21x an FY17 (ends March '17) EPS consensus of $3.72. Baidu trades for 20x a 2016 EPS consensus of $9.29.
Thu, Jun. 11, 2:53 PM
- After talking with tax lawyers and lobbyists, policy analysis/research firm Capstone thinks recent comments from an IRS official about potentially changing tax-free spinoff rules were "carefully choreographed" by the IRS and Treasury, and "designed to send a message to Yahoo (NASDAQ:YHOO) concerning the Alibaba spinoff, though neither company was mentioned by name."
- Capstone thinks an adverse ruling would have an $11B impact on Yahoo, whose 384M-share Alibaba stake is currently worth $33.7B. It also notes (citing a law firm) the aggregate value of all spinoffs occurring in 2012 and 2013 was respectively just $41B and $33B.
- Yahoo tumbled on May 19 after an IRS official stated the agency is reviewing rules on "spinoffs of trades or businesses that are small compared with a company’s other assets," but recovered a chunk of its losses after responding to the comments.
Thu, May 28, 11:21 PM
- Yahoo Japan (OTCPK:YAHOY) is up 8.6% in Tokyo, the biggest single-day jump in two months, as it says it's looking to team with Alibaba Group (NYSE:BABA) to enter China's e-commerce market.
- The company -- Japan's third-largest e-tailer -- will help guide Japanese companies to sell products, especially household goods, on Alibaba's Tmall and Tmall Global sites.
- Japanese goods' increasing popularity in China is providing expansion opportunities, Yahoo Japan (a JV between Softbank (OTCPK:SFTBY) and Yahoo (NASDAQ:YHOO)) noted in a statement.
- Softbank is up 1.7% in Tokyo.
Wed, May 20, 9:21 AM
- A Yahoo (NASDAQ:YHOO) statement made via Tumblr: "Yahoo understands that the IRS’s statement is not specific to Yahoo’s planned Q4 2015 spin-off of its remaining stake in Alibaba Group (NYSE:BABA) and Yahoo Small Business, reflects no change in applicable law, and does not affect previously filed ruling requests. Yahoo filed its pending ruling request with the IRS in Q1 2015. Yahoo continues to work toward completing the planned spin-off in Q4 2015."
- Shares fell 7.6% just before the close yesterday after it was learned IRS senior technician reviewer Isaac Zimbalist had stated the IRS is reviewing rules on "spinoffs of trades or businesses that are small compared with a company’s other assets," and would hold in abeyance new spinoff ruling requests. He added existing applications would still be reviewed, while noting this was subject to change.
- Zimbalist: "The issue comes down to whether we’ve dropped a hot-dog stand or a lemonade stand into a business that is primarily publicly traded stocks, cash and other wonderful things that I call appreciated property." Yahoo has included its Small Business services unit with the Alibaba spinoff in an attempt to meet the IRS' Active Business requirement. BGC's Colin Gillis notes the IRS' review could also have implications for a potential Yahoo Japan spinoff.
- Yahoo has rebounded to $42.11 in premarket trading. Alibaba is nearly unchanged.
Tue, May 19, 4:28 PM
- Bloomberg reports the IRS is considering rule changes about "spinoffs of trades or businesses that are small compared with a company’s other assets." An IRS official states the agency will hold in abeyance new spinoff ruling requests while the issue is studied. Existing requests will continue to be reviewed, but that's subject to change.
- The report has sparked fears the IRS won't sign off on Yahoo's (NASDAQ:YHOO) plans to do a tax-free spinoff of its 384M-share Alibaba (NYSE:BABA) stake later this year.
- Yahoo closed down 7.6%. Alibaba rose 1.3% on hopes 384M more shares won't become available for sale.
- Earlier: Yahoo takes late-day tumble
Tue, May 19, 3:46 PM
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