BABA Feb 2020 275.000 put

OPR - OPR Delayed price. Currency in USD
55.20
0.00 (0.00%)
As of 9:44AM EST. Market open.
Stock chart is not supported by your current browser
Previous close55.20
Open55.20
Bid56.40
Ask57.55
Strike275.00
Expiry date2020-02-21
Day's range45.05 - 45.05
Contract rangeN/A
VolumeN/A
Open interestN/A
  • The IBD Live Weekly Recap - Week Of Feb. 10
    Investor's Business Daily Video

    The IBD Live Weekly Recap - Week Of Feb. 10

    Here's what you may have missed on IBD Live this week amid strong earnings from companies like Nvidia, Alibaba, and Canopy Growth.

  • Coronavirus Infects Equity Markets: 3 Blue Chips To Consider
    Zacks

    Coronavirus Infects Equity Markets: 3 Blue Chips To Consider

    The coronavirus is infecting the equity markets as this disease spreads past China's borders

  • Virus Outbreak Exposes $46 Billion Rift in China’s Tech Industry
    Bloomberg

    Virus Outbreak Exposes $46 Billion Rift in China’s Tech Industry

    (Bloomberg) -- The coronavirus epidemic is exposing the dichotomy of the world’s second largest tech economy. Chinese businesses like Alibaba and Meituan with outsized footprints in the material world are rushing to contain the fallout while virtual denizens ByteDance Inc. and Tencent Holdings Ltd. ride a surge in social media and entertainment.It boils down to the difference between hawking analog and digital wares. Alibaba Group Holding Ltd. and Meituan Dianping have shed $28 billion of market value since Covid-19 erupted in central China in January because they depend on millions of people and trucks to ferry packages and meals through an increasingly tangled nationwide transport network. WeChat operator Tencent, which flogs virtual goods like costumes and armor in mobile games or sprinkles advertising online, has gained about $18 billion. Its market value now hovers around half a trillion dollars.More than any other company, Alibaba’s fate is intertwined with that of the world’s No. 2 economy. Its caution on Feb. 13 about weakening earnings exposed just how much China’s most valuable company depends on old-fashioned elbow grease in delivery, manufacturing and logistics. The e-commerce giant warned of a “significant” hit this quarter because the people who take orders, fabricate products and then ship them to doorsteps can’t get to their jobs. It’s a reminder of how much the fortunes of China’s tech giants hinge on unglamorous, analog tasks -- at their peak, Alibaba’s partners deliver upwards of a billion packages a day.“We just have fewer delivery people now because my co-workers couldn’t get back to work,” said a courier for Alibaba partner SF Express who would only give his surname as Qiu before dashing off. “Those of us still working are assigned more packages. Good thing I got a break during the Spring Festival,” he said, referring to the Lunar New Year holidays.Read more Alibaba Warns Virus Having Broad Impact on Chinese EconomyRead more: Chinese Abandon Food Delivery Fearing Drivers Will Spread VirusChina’s corporations are struggling to cope with the coronavirus outbreak to varying degrees. Some such as Tencent and TikTok-owner ByteDance are benefiting from a vastly increased audience as millions are confined to their homes, with mobile gaming and livestreaming their only recourse to entertainment. Tencent, which reports earnings in March, is expected to unveil a surge in time spent on games such as Honor of Kings and growth on WeChat. For now, analysts are projecting its fastest pace of sales growth since 2018 in both the December and March quarters.But few in tech offer as broad a glimpse into business under the epidemic than Alibaba. The company initially benefited from a surge in online shopping from millions confined by the largest work-from-home undertaking in history. Yet, it turns out, a lot of the millions of packages that get delivered every day are cheap items such as groceries and face masks. Consumers are eschewing pricier merchandise given growing fears that the eventual hit to the Chinese economy could be far worse than expected.“Logistics is probably the biggest bottleneck right now, but it is improving. However, it is not the only bottleneck,” said Jerry Liu, a Hong Kong-based analyst with UBS who expects things to get back to normal only around the second half. “We do assume weaker demand for e-commerce platforms even if online penetration is higher in recent weeks. Based on our checks, a part of that is due to less spending on things that are not urgent, such as apparel or electronics, versus outbreak prevention items or food.”Read more: How Fast Can China’s Economy Bounce Back from Virus LockdownAlibaba’s got other problems too -- like discontent in the ranks. Hangzhou, its home, is a city under self-imposed siege. Just an hour from Shanghai, the city famed for its scenic lake has imposed some of the harshest quarantine and coronavirus-prevention measures outside of the outbreak’s epicenter. Into its third week, the clampdown is posing unusual challenges to tens of thousands of employees that chieftain Jack Ma proudly proclaimed only last year were more than willing to go the extra mile.For one employee, the ordeal began weeks ago. Local officials barred the Alibaba staffer from returning to her own rental apartment for days because she was from out-of-town. She lived and worked from a colleague’s apartment, sending a selfie to her boss every morning to prove she was logged on and raring to go. She’s only allowed to leave her temporary quarters once every three days.“There’s no such thing as counting overtime hours at Alibaba,” said the 27-year-old who goes by Lilac but wouldn’t allow the use of her last name for fear of reprisal. “You have to check messages on DingTalk whenever it rings.”What Bloomberg Intelligence SaysAlibaba’s sales may contract in its core China retail marketplaces and local services business in the coming quarter even if the coronavirus outbreak subsides, as logistic and production disruptions faced by merchants could take time to resolve.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Read more: ‘Nightmare’ for Global Tech: Virus Fallout Is Just Beginning An Alibaba spokesperson said the company was helping merchants cope. Streams on Taobao Live, where brands and merchants showcase products to prospective shoppers, have more than doubled since the start of February, the company said in a messaged statement.“On our platforms and throughout our ecosystem, we’ve rolled out measures to mitigate much of the pain being felt by merchants and to restore ‘normalcy’ through technology,” the spokesperson said.Longer term, any hit to China’s economy will of course wallop consumer spending across the board -- regardless of whether it’s virtual or physical goods. That means Tencent and ByteDance get hammered too.But Alibaba has an ace up its sleeve. Its cloud computing arm is China’s leader and the foundation for much of a post-outbreak surge in online activity -- the virtual piping of increasingly digital businesses. Though barely a tenth of revenue at present, it’s been growing at 60%-plus year-on-year even before the epidemic.Their own warnings aside, investors know better than to count the company out. During the SARS epidemic of 2003, Alibaba not only remained operational despite stringent quarantine measures, it successfully launched Taobao from Ma’s apartment -- the online shopping platform that catapulted the company into the stratosphere.\--With assistance from Lulu Yilun Chen.To contact the reporters on this story: Zheping Huang in Hong Kong at zhuang245@bloomberg.net;Claire Che in Beijing at yche16@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Virus Investors Don't Need No (Online) Education
    Bloomberg

    Virus Investors Don't Need No (Online) Education

    (Bloomberg Opinion) -- Investors looking for an angle on the coronavirus crisis have naturally landed upon the online education sector in the hopes that tens of millions of quarantined school kids will turn such providers into profit-making machines on par with China’s hottest internet companies.Almost every mainland province and city has pushed back the starting date of the spring term by weeks. Most students haven’t seen the inside of a classroom since Lunar New Year in late January. Not wanting to be left behind, students, their schools and parents have turned to online alternatives, including options not offered by traditional education businesses.Giant Alibaba Group Holding Ltd., for example, added 100,000 servers to support its free DingTalk messenger, which is being used across the country to help pupils communicate with teachers and watch online classes. A similar tale is told at WeChat provider Tencent Holdings Ltd.Even San Fransciso-based Seesaw Learning Inc., developer of an early-childhood learning and communication app with less than 10% of revenue from China, saw a 31% jump in traffic from there and 21% from Hong Kong. Co-founder Adrian Graham admits it’s hard to tell whether that spike is due to normal post-new year usage increases or the impact of quarantined kids at the mostly international schools in the Greater China region that use the product.As a result, this could be the biggest sustained, mass experiment in online education since the internet was founded in the 1980s. But for those who specialize in education as a business, there’s little to suggest a surge of online students will boost the bottom line.In China, the commercial education business is driven chiefly by demand for after-school tuition (AST) classes. In physical classrooms, also known as cram schools, which are owned and operated by these providers, children as young as kindergartners spend an extra few hours after their normal day (and on weekends and during school holidays) to bone up on core subjects of Chinese, English and mathematics.To deal with the quarantines, TAL Education Group, one of China’s largest education companies, is moving students from offline classes to its programs and refunding the difference in tuition fees, with online up to 50% cheaper, Daiwa Capital Markets HK Ltd. analysts John Choi and Candis Chan wrote this month. New Oriental Education & Technology Group Inc., the other big player in Chinese education and a leader in test-preparation courses, is also moving students to its web and app platforms, they wrote. A key narrative supporting the thesis for big online education profits is that the massive home-schooled education program now under way will work as great marketing for companies like TAL and New Oriental, which spend a lot of money just getting students to enroll in their classes. A captive market of kids forced to learn via the internet might then be converted to long-term online tuition customers. That’s the theory, anyway.In truth, they’d better hope that doesn’t happen. Online is not as profitable as physical classrooms, competition is tougher, and average prices are falling faster. Take TAL as an example. Revenue for the three months to Nov. 30 climbed 47% from the previous year. Online sales were the major driver, climbing 86%. But actual enrollments grew 107%. In other words, student numbers rose faster than revenue because average prices actually fell 9% for the period.So while online has expanded, it still accounts for only 18% of total revenue. The glass-half-full scenario would tell you that there’s great potential ahead. A more pessimistic analysis would suggest that if TAL needs to cut prices this early, then there’s not a lot of room to boost profitability as time marches on. And the company is already suffering pressure that is hurting the bottom line. Operating margin shrank to 9% from 12% in the previous year, with net income plunging 77%.New Oriental isn’t faring much better. Online education accounted for 6% of its revenue in the latest fiscal year. The company gets more than 80% of sales from language training and test preparation. That indicates that internet-based programs have great potential. Yet data show New Oriental is struggling to scale. Subsidiary Koolearn Technology Holding Ltd., which it spun off and listed in Hong Kong, posted revenue growth of just 19% in the six months to Nov. 30. What’s more, operating loss tripled with margin deteriorating from -4.6% to -16.5%.One company might have nailed it, however. GSX Techedu Inc. describes itself as “a leading online K-12 large-class after-school tutoring service provider.” GSX’s niche is massive live online classes — it boasts being able to host 100,000 students in a single broadcast — that allow it to rake in cash while saving on teacher salaries, which account for a major proportion of the costs borne by rivals.That scalability helped it turn profitable in 2018, a feat repeated last year, earning it an operating margin of 10.7%, in line with TAL and New Oriental.GSX has since been joined in offering massive classes. More than 2.4 million users are reported to have tuned in for some TAL elementary-school classes during the coronavirus period. Others are jumping aboard, too. Alibaba, for example, developed DingTalk for enterprise use. While it launched a campus-focused program for the product last year, it wasn’t until the current crisis that its popularity in education really took off. Worse for GSX, Alibaba is offering it for free and allowing schools to make use of existing teachers and materials.So while the outbreak is necessitating internet-based education options, it’s also highlighting how cheap online learning can be. The great thing about the internet is its ability to allow anyone to deliver content easily and cheaply. That may not be the outcome education companies really would be hoping for.To contact the author of this story: Tim Culpan at tculpan1@bloomberg.netTo contact the editor responsible for this story: Patrick McDowell at pmcdowell10@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • SoftBank’s Son to Pitch U.S. Investors Under Cloud of WeWork
    Bloomberg

    SoftBank’s Son to Pitch U.S. Investors Under Cloud of WeWork

    (Bloomberg) -- Masayoshi Son will head to New York next month for the first time since the implosion of WeWork, seeking to persuade hedge funds and institutional investors that the fortunes of SoftBank Group Corp. have turned since the disastrous investment.The Japanese billionaire is scheduled to address investors on March 2. There, he could point to the approved sale of Sprint Corp., a rally in Uber Technologies Inc. shares and Elliott Management Corp.’s purchase of SoftBank stock as signs of progress at his company, said people familiar with the plans. It’s unclear where WeWork will fit into the agenda.Within SoftBank, there’s disagreement about how to convey the company’s strategy. Son, 62, is known for his eccentric financial presentations, which have included a “hypothetical illustration” of WeWork profitability and stock photos of ocean waves and calm waters. One memorable slide from 2014 contained only a drawing of a goose and the words: “SoftBank = Goose.” Many staff at headquarters in Tokyo love the founder’s showmanship, but some senior executives are exasperated and argue a clearer and more sober message is needed, said people familiar with internal discussions who asked not to be identified because the matter is private.Ultimately, Son will decide. He has downplayed any pressure from Elliott, a New York-based activist investor that disclosed a nearly $3 billion stake in SoftBank this month. Son called Elliott an “important partner” and said he’s in broad agreement with the investor’s arguments for buybacks and increasing the stock price. Son has signaled less receptiveness to Elliott’s other suggestions: selling more of the stake in Alibaba Group Holding Ltd. and reining in the Vision Fund, a $100 billion investment vehicle that accounted for more than $10 billion of losses in the past two quarters.In private meetings with SoftBank, Elliott raised issues over the clarity of SoftBank’s strategy, people familiar with the talks said. SoftBank is planning to make hires within its investor relations department to help shape the message to shareholders. SoftBank declined to comment. A spokesperson for Elliott declined to comment.“Right now, serious heat is being applied on Son,” said Justin Tang, head of Asian research at United First Partners in Singapore. “Son has to be seen actually doing something.”Son’s heading into the meeting with one win under his belt: T-Mobile US Inc. and Sprint have agreed to new terms for their pending merger, a key step toward completing a transaction that will unload the loss-making carrier and unlock new capital for SoftBank. Its shares rose as much as 3.3% in Tokyo Friday.T-Mobile, Sprint Renew Deal as Merger Clears Regulatory HurdlesAlthough next month’s event was scheduled before Elliott disclosed its stake and is not designed to specifically address the activist investor’s involvement, it will be a focus for attendees, said people familiar with the preparations. Executives are bracing for questions about Elliott’s intentions and how far the shareholder will go to boost the stock’s value.Goldman Sachs Group Inc. is organizing the March event, the people said. The firm, which helped Japan’s Sony Corp. and Toshiba Corp. in their dealings with activist investors, is vying for the job of advising SoftBank on Elliott, said a different person said. However, SoftBank is likely to manage the relationship in-house, another person said. The job may fall to Marcelo Claure, the chief operating officer who’s helping oversee the WeWork debacle; Katsunori Sago, the chief strategy officer and a former Goldman Sachs executive; or Ron Fisher, a director and trusted adviser to Son. A Goldman representative declined to comment on SoftBank.Dogs and PizzaSoftBank is recovering from a series of stumbles in recent months. WeWork’s plan to go public last year imploded, forcing SoftBank to arrange a rescue financing of $9.5 billion in October. Uber, despite a two-month surge, is still trading about 10% below last year’s offering price. The Vision Fund has suffered other high-profile setbacks, including investments in failed online retailer Brandless Inc., dog-walking app Wag Labs Inc. and pizza robot company Zume Pizza Inc.Elliott has said it took the stake in SoftBank because the Japanese company’s shares are woefully undervalued compared with its assets. Son himself has been pleading the case with increasing frequency. SoftBank’s own sum-of-parts calculation puts its total value at 12,300 yen a share ($111). That’s more than double SoftBank’s actual share price, which values the company at about $104 billion. Elliott has pegged SoftBank’s net asset value at about $230 billion, people familiar with the discussions have said.The disconnect between what SoftBank and Elliott say the company is worth and the market value can be explained by several quirks of how the business is run, according to a report from Pierre Ferragu, an analyst at New Street Research. Many shareholders would like the company to return more capital and improve its governance, he wrote. Risks associated with the Vision Fund and a lack of details about tax liabilities associated with cashing out its investments are other factors.SoftBank recognized the need for more oversight as early as 2018, when it charged Claure with a broad review of operations across SoftBank companies. Claure, the former head of Sprint, spent months assembling a team of about 40 executives. In the end, he was forced to cede control of the so-called SoftBank Operating Group to the man it was supposed to be overseeing: Rajeev Misra, the head of the Vision Fund.Elliott wants SoftBank to set up a special committee to review investment processes at the Vision Fund. Elliott argues the fund has dragged down the share price despite making up a small portion of assets under management, said people familiar with the discussions.Some at SoftBank are resistant to the idea of an oversight committee. Instead, SoftBank is seeking to resolve issues at the Vision Fund with new governance standards for the companies it invests in. The new rules will encompass how the fund approaches the composition of the board of directors, founder and management rights, rights of shareholders, and mitigation of potential conflicts of interest.Son has conceded that missteps with the original fund is making it difficult to raise money for a successor. He said last week that SoftBank may need to invest in startups using solely its own capital for a year or two.‘Black Swan’Elliott is also calling for a buyback of as much as $20 billion. A repurchase of that scale could boost SoftBank’s shares by 40%, Ferragu estimated. SoftBank’s last share repurchase was announced about a year ago, a record 600 billion yen. It sparked a rally that pushed the stock to its highest price in about two decades.Selling Alibaba shares to pay for a buyback, as Elliott has proposed, could be a point of contention with Son. In the past, Son has used the shares as collateral to borrow money for big acquisitions, including the $32 billion purchase of chip designer ARM Holdings. Son said last week during a quarterly financial briefing that he’d prefer to sell as little as possible and that there’s “no rush” to do so.SoftBank said on Wednesday it plans to borrow as much as $4.5 billion against shares of its Japanese telecom unit. The company, which had 3.8 trillion yen of cash and equivalents at the end of December, said it was raising capital for operations. SoftBank’s debt load exceeds $120 billion.Son’s reliance on debt is raising alarms, said Tang, the financial analyst. “He’s going to get wiped out if there is some black swan event,” Tang said. “SoftBank needs to de-leverage, and the best way to do it is to sell the Alibaba stake.”Elliott has a tradition of using strong-arm tactics to get its way with target companies, but there’s little chance of that happening with SoftBank. Elliott’s stake enables it to call an emergency shareholder meeting, but pushing through a proposal without the founder’s backing is a long shot. Son, who often goes by the nickname Masa, controls more than a quarter of SoftBank stock through various vehicles, and the company bylaws require two-thirds of votes to pass any proposal made through the board, according to a person with knowledge of the rules.“Unless everyone is against him,” said Tang, “it’s not possible to dislodge Masa.”(Updates with share action in the seventh paragraph)\--With assistance from Scott Deveau.To contact the reporters on this story: Pavel Alpeyev in Tokyo at palpeyev@bloomberg.net;Giles Turner in London at gturner35@bloomberg.net;Takahiko Hyuga in Tokyo at thyuga@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Mark Milian, Colum MurphyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Coronavirus' biggest winners: Tech providers in China, Hong Kong
    Yahoo Finance

    Coronavirus' biggest winners: Tech providers in China, Hong Kong

    The coronavirus outbreak is roiling China, but some startup technology companies are actually benefitting as isolated citizens flock to a range of solutions to achieve a sense of normalcy.

  • Kroger, Alibaba, Bed Bath & Beyond, Apple: Companies to Watch
    Yahoo Finance

    Kroger, Alibaba, Bed Bath & Beyond, Apple: Companies to Watch

    Kroger, Alibaba, Bed Bath & Beyond and Apple are the companies to watch.

  • Bloomberg

    HSBC Is No Man's Land for Quinn or Anyone Else

    (Bloomberg Opinion) -- HSBC Holdings Plc is embarking on a radical overhaul while it continues the hunt for a permanent chief executive. For investors, the strategic muddle of this bizarre situation should be at least as troubling as the stinging cuts, $7.3 billion of charges and suspension of buybacks that the bank announced with its earnings Tuesday.The London-based lender will cut as many as 35,000 jobs, reduce gross assets by more than $100 billion by 2022, shave annual costs by $4.5 billion and slash the size of its investment bank in Europe and U.S. in the biggest raft of changes for years. All this will be overseen by Interim Chief Executive Officer Noel Quinn pending the appointment of a permanent successor to John Flint, who was ousted last August.Quinn was left to present the plan even as HSBC declined to confirm him in the job. This is bad on two levels. First, it undercuts the authority and investor confidence that Quinn might otherwise be expected to enjoy, should he eventually be appointed. At the very least, the delay signals that the board has harbored doubts about his suitability. Second, going ahead with the revamp may impede the search for a replacement.Any chief executive worth his or her salt will expect to put a personal stamp on the company. But the biggest decisions have already been made. This reshaping will have Quinn’s fingerprints all over it. That may narrow the options for HSBC Chairman Mark Tucker. Stephen Bird, Citigroup Inc.’s former top executive in Asia and the leading external candidate for the job, already has ruled himself out, the U.K.’s Sunday Times reported last weekend, citing unidentified sources.HSBC might argue that waiting wasn’t an option after years of sub-par performance. “Parts of our business are not delivering acceptable returns,” Quinn said in Tuesday’s statement. HSBC will shift resources to higher-returning markets, while squeezing the cost base and exiting some business lines. “The current strategy is in no man’s land,” as one investor told Bloomberg News pre-earnings.No one could accuse HSBC of sparing the knife this time. The job cuts are equal to about 15% of the workforce. They’re also an answer to those who, like this writer, have criticized the bank for being overly timid in the past. Still, the overhaul may end up exacerbating some of the vulnerabilities they seek to address.The restructuring makes the bank even more hostage to the fortunes of Hong Kong and mainland China, two economies struggling with slowing growth aggravated by the coronavirus outbreak. Hong Kong was already the source of 90% of HSBC’s profit in the third quarter. The city is going to become an even more glaring presence in its books.Besides an economy in recession, competition is getting tougher for HSBC in the city, as online lenders backed by Tencent Holdings Ltd. and Alibaba Group Holding Ltd. prepare to launch this year. Hong Kong’s dominant bank has also had to navigate political minefields, including being the target of the public ire last year after it closed an account linked to pro-democracy protesters.China, meanwhile, remains a challenge. HSBC is still struggling  to extricate itself from Beijing’s bad books for providing U.S. prosecutors with information that led to the arrest of Huawei Technologies Co.’s  chief financial officer in late 2018. And disruption to supply chains from the virus outbreak may lead to more credit losses, the bank has said.That means it’s going to take a long time before HSBC achieves the returns Tucker seeks. While 2019 adjusted pretax profit of $22.2 billion beat analysts’ estimates, HSBC’s fourth-quarter return on tangible equity was a mere 8.4%. That’s much lower than the more than 11% target it abandoned in October. Even its new goal of 10%-12% by 2022 looks unambitious beside the 18% return of JPMorgan Chase & Co. HSBC shares closed 2.8% lower in Hong Kong after the earnings, the biggest decline in more than a year.Ultimately, HSBC’s biggest risk may be that Quinn’s cuts cause the lender to double down on greater China just as growth in this part of Asia is uncertain. Outside CEOs won’t be clamoring to steer this ship. Quinn may just be stuck with the job.  To contact the author of this story: Nisha Gopalan at ngopalan3@bloomberg.netTo contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Apple's Virus Cut Puts All Eyes on Tech Bellwether
    Bloomberg

    Apple's Virus Cut Puts All Eyes on Tech Bellwether

    (Bloomberg Opinion) -- Apple Inc. has thrown out its March-quarter revenue guidance three weeks after providing it.Despite factoring in possible downside from the China coronavirus outbreak in its original forecast, the iPhone maker realized that things have deteriorated much more than it had anticipated. It gave no new figure and merely said the old one no longer applies, an admission that the company really can’t quantify the impact.While we should expect similar downbeat tones through the rest of the sector, this really means we should keep tabs on the one company that sits at the heart of the global technology supply chain: Taiwan Semiconductor Manufacturing Co.Apple is TSMC’s largest customer. When the chipmaker gave its own first-quarter and full-year forecasts Jan. 16, the world had barely heard of the disease now riveting its attention.Since then, Apple has shut stores in China and downstream assemblers like Hon Hai Precision Industry Co. have struggled to ramp up production after the Lunar New Year break amid continuing quarantines and a shortage of workers willing to return to the factory floor.Nvidia Corp., which designs graphics chips, is another major client of TSMC. On Feb. 13, it said the virus had cut its forecast by $100 million. That’s only around 3% of expected revenue for the quarter, but it all eventually adds up. Alibaba Group Holding Ltd., not a direct customer, forecast a decline in revenue from its core businesses as consumers on its e-commerce platform shy away from spending. At least some of those lost sales will be electronics products, which use chips made by TSMC.Chinese companies, including Huawei Technologies Co., accounted for 20% of TSMC’s revenue last year. With numerous enterprises in China on lockdown, adding to the squeeze on both demand and production, it’s unlikely such clients will be able to escape the impact.And last week, wireless industry association GSMA scrapped its annual Mobile World Congress scheduled for Feb. 24 in Barcelona because most of its major participants had already pulled out. This isn’t a consumer event, but the cancellation shows the breadth and reach of the outbreak’s impact on business. Whichever way you look at it, the global tech slowdown leads back to TSMC. Revising guidance mid-quarter isn’t without precedent, and TSMC usually does with a statement filed mid-afternoon Taipei time. It did so a year ago this week, cutting its sales and profit outlook after facing troubles with chemicals used in the manufacturing process. The result was a 10% reduction in operating profit. Just a few months before that, a production hiccup caused by a computer virus in its equipment hurt gross profit by around 5%. An earthquake four years ago sliced operating income by about 7%. The biggest mid-quarter guidance cut I could find is the 25% hit to operating profit that it took in December 2008 as the financial crisis brought the world economy to a halt.To be sure, it’s not certain that a cut will be necessary this time. Clients may decide that they want to keep building up inventory of the chips that come out of TSMC’s factories. But at some point, end-demand may dictate a more cautious approach to procurement. This epidemic is proving hard to quantify, so TSMC’s biggest challenge may not be whether to revise guidance, but what new number to give. To contact the author of this story: Tim Culpan at tculpan1@bloomberg.netTo contact the editor responsible for this story: Patrick McDowell at pmcdowell10@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • SoftBank's Latest Fund Wheeze Sets Off New Alarms
    Bloomberg

    SoftBank's Latest Fund Wheeze Sets Off New Alarms

    (Bloomberg Opinion) -- SoftBank Group Corp. became vulnerable to activist attack by Elliott Management Corp. because of the harmful noise generated by the Japanese technology investor’s giant Vision Fund. That noise just won’t die down.Sunday brought a report in the Financial Times that Vision Fund head Rajeev Misra is looking to raise a multi-billion dollar fund to buy listed stocks. The blueprint was established last year with SoftBank’s investment in controversial German payments company Wirecard AG via a convertible bond. The new plan looks like a bid to do more unconventional equity investments in the same vein.The development marks a strategic departure. After all, the $100 billion Vision Fund was established to take stakes in private, tech-focused startups. SoftBank has already had to deny that there’s a “misalignment” between Misra and the group’s founder and Chief Executive Officer Masayoshi Son over the idea of investing more in public companies. But it’s not hard to see why Son, and other SoftBank shareholders, might need persuading.Setting up a listed-equity vehicle would bring in new revenues from management and performance fees. It could also create capital gains (or losses) from any investments in the fund that are made using SoftBank’s own capital. Whether it would make such commitments — and the decision-making around any such moves — is unclear. The FT said funding of about $4 billion is being lined up from sovereign funds in Abu Dhabi and Kazakhstan.There is some logic to Misra’s idea. It would, theoretically, marry SoftBank’s nous in emerging technology with the experience in trading and structured products possessed by a bunch of former bankers working for the Vision Fund. The result could bring a new dimension to SoftBank, similar to how the American buyout giants have become purveyors of real-estate, private-equity and credit strategies.The numbers being spoken of may be small relatively. But SoftBank’s core competence is in a specific sector, technology, and a specific category, late-stage venture capital. It needs to be crystal clear about why it would have an edge in the listed markets. The new offshoot would engage in financial engineering by wrapping listed investments in leveraged structures. But would it be looking to hire people or engage advisers with that expertise in a public-equity strategy if it didn’t already have it on the payroll? Or is the tail wagging the dog?SoftBank shares trade at a near 60% discount to net asset value, hence Elliott’s interest. That’s due largely to high-profile mishaps in the Vision Fund, such as WeWork, even though the fund still accounts for only a 10% slice of SoftBank’s overall managed assets. The risk is that, as with the Vision Fund, this venture has an outsized impact on sentiment toward SoftBank overall.Ironically, SoftBank has a huge opportunity already to dabble in the stock market and do financial engineering. The discount at which its shares trade means it could buy nearly $50 billion of underlying investments by spending $20 billion on its own stock. Son could fund such a buyback either by raising debt or selling some of SoftBank’s shares in Alibaba Group Holding Ltd., Sprint Corp., telecoms subsidiary SoftBank Corp. or even chipmaker Arm Holdings via a public offering. Maybe the brains in the Vision Fund could start by identifying which of these levers to pull.To contact the author of this story: Chris Hughes at chughes89@bloomberg.netTo contact the editor responsible for this story: James Boxell at jboxell@bloomberg.netThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Chris Hughes is a Bloomberg Opinion columnist covering deals. He previously worked for Reuters Breakingviews, as well as the Financial Times and the Independent newspaper.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Alibaba's DingTalk gets bad grades from China's stuck-at-home students
    Reuters

    Alibaba's DingTalk gets bad grades from China's stuck-at-home students

    Alibaba Group's communication app DingTalk has begged China's school students to stop venting anger on the software after they gave it poor grades when made to use it to attend online classes. Millions of Chinese are stuck at home because of the coronavirus outbreak, which has killed 1,770 so far in mainland China. Authorities shut schools until at least the end of February to try to stop the spread of the virus and many school students were hoping for an extended holiday.

  • China seeks help of national tech giants to track coronavirus with QR codes
    Reuters

    China seeks help of national tech giants to track coronavirus with QR codes

    China's government is enlisting the help of Alibaba Group Holding Ltd and Tencent Holdings Ltd to expand colour-based systems for tracking individuals affected with the coronavirus nationwide. On Wednesday, Alipay, the payment app operated by Alibaba's financial division Ant Financial, released a feature in collaboration with the government that assigns a coloured QR code representing the health of residents in Hangzhou. Users in the city fill out an online form reporting their ID number, whether they have travelled outside Hangzhou recently, and any symptoms they might have that suggest an illness, such as fever or a heavy cough.

  • Alibaba Fiscal Q3 Earnings Put These ETFs in Focus
    Zacks

    Alibaba Fiscal Q3 Earnings Put These ETFs in Focus

    Alibaba reported strong third-quarter fiscal 2020 results, wherein it beat earnings and revenue expectations.

  • Alibaba Cloud revenue reaches $1.5B for the quarter on 62% growth rate
    TechCrunch

    Alibaba Cloud revenue reaches $1.5B for the quarter on 62% growth rate

    Alibaba issued its latest earnings report yesterday, and the Chinese eCommerce giant reported that cloud revenue grew 62 percent to $1.5 billion U.S., crossing the RMB10 billion revenue threshold for the first time. Alibaba also announced that it had completed its migration to its own public cloud in the most recent quarter, a significant milestone because the company can point to its own operations as a reference to potential customers, a point that Daniel Zhang, Alibaba executive chairman and CEO, made in the company's post-earnings call with analysts.

  • Alibaba (BABA) Surpasses Q3 Earnings & Revenue Estimates
    Zacks

    Alibaba (BABA) Surpasses Q3 Earnings & Revenue Estimates

    Alibaba Group Holding's (BABA) fiscal third-quarter 2020 earnings are driven by steady improvement in core commerce and strong cloud business.

  • China’s Startups on the Ropes After Virus Freezes Funding
    Bloomberg

    China’s Startups on the Ropes After Virus Freezes Funding

    (Bloomberg) -- Sign up for Next China, a weekly email on where the nation stands now and where it's going next.China’s highest-flying technology startups are struggling to stay afloat after the coronavirus outbreak threatened to paralyze critical venture capital funding.Investment in an industry that runs on face-to-face contact and gut instinct has fallen off a cliff since the epidemic erupted in January. Venture capital funds slashed startup investment by 60% in January from a year ago, London-based consultancy Preqin estimates. That’s because angel investors and venture capitalists accustomed to road-testing new technology or grilling entrepreneurs in person now shun interaction and work from home.China’s tech industry -- which prides itself on honing online communications from social media to mobile payments -- is thus ironically stumbling thanks to the lack of the most basic forms of human contact. If the situation persists -- and there are few signs that stringent nationwide quarantine measures will unwind soon -- that jeopardizes a swath of the millions of startups that collectively represent an important growth driver for the world’s second largest economy. It’s a double-whammy for an industry that in 2019 grappled with volatile capital, a slowing economy and U.S.-Chinese tensions.Read more: China’s 58 Home Is Said to Delay U.S. IPO as Virus Hurts Demand“As an entrepreneur who went through SARS in 2003, I fully understand the challenges entrepreneurs face,” Neil Shen, the founding partner of Sequoia Capital China, said in a statement. “We will fully stand by to provide help and support to the companies we backed in any way possible,” said Shen, regarded by many as one of the country’s most prominent tech investors.Read more: ‘Nightmare’ for Global Tech: Virus Fallout Is Just Beginning (3)A backlash against China’s tech champions in 2019 had begun damping a decade or more of go-go optimism and investment that fueled one of the fastest and largest creations of wealth the world has seen. Trade curbs imposed by Washington soured investor interest, suppressing deal flow. On a global stage, WeWork’s implosion fanned caution around potentially overblown tech valuations. The euphoria that created more than 100 unicorns, or billion-dollar firms, in China dissipated toward the end of last year.The outbreak was the last thing China’s tech sector needed.“This hasn’t been the start to the year of the rat that China was hoping for,” said Ee Fai Kam, head of Preqin Asian operations, adding that the setback is “coming on the back of a bruising 2019 when trade and tech tensions with the U.S. caused investors to exercise an abundance of caution.”Following the Lunar New Year break, some of the country’s most prolific investors – including those at Matrix Capital and Genesis Capital -- confined themselves to home, calling off meetings and mothballing visits to companies. “A lot of our projects require on-site due diligence and we are wary to push forward deals without it,” explained Snow Hua, a managing partner at Cherubic Ventures.Others are trying to engage and mitigate the damage to their existing portfolio companies through virtual conference calls. Sequoia China is planning to organize two investment sessions for early-stage startups via the conferencing service Zoom. As of Wednesday, investors from more than 50 venture capital houses had signed up.At the same time, red-hot sectors from artificial intelligence to ride-hailing and online property are reeling. On Thursday, China’s largest company by market value, Alibaba Group Holding Ltd., warned of a significant hit to revenue growth in the March quarter from an epidemic that’s wreaking havoc across broad swathes of the Chinese economy. Didi’s daily active users fell 54.1% on Jan. 27 compared with Jan. 16, before the Lunar New Year break, according to data compiled by Aurora Mobile Ltd. Read more Alibaba Warns Virus Having Broad Impact on Chinese EconomyEven those benefiting from a short-term spike in orders -- such as online grocery delivery firms -- are wary of longer-term fallout. 58 Home, the maid and home-maintenance service owned by a Chinese Craigslist equivalent, is said to have delayed its planned U.S. initial public offering after the coronavirus outbreak crippled customer demand. Others such as Uber-backed Didi Chuxing or rental startup Danke may begin to suffer as the capital winter drags on.“It’s going to be a tremendous challenge for a lot of startups,” said Wang Jun, chief financial officer for fresh produce delivery firm Missfresh. “It’s winter time for capital flow, and companies need to produce blood on their own to become cash-positive.”Read more: Coronavirus Outbreak Drives Demand for China’s Online Grocers(Updates with data on Didi’s fall in daily active users in ninth paragraph)To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.netTo contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, ;Peter Elstrom at pelstrom@bloomberg.net, Edwin Chan, Jonas BergmanFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • China’s 58 Home Said to Delay U.S. IPO as Virus Hurts Demand
    Bloomberg

    China’s 58 Home Said to Delay U.S. IPO as Virus Hurts Demand

    (Bloomberg) -- 58 Home, the maid and home-maintenance service owned by China’s Craigslist equivalent 58.com Inc., has delayed its planned U.S. initial public offering, according to people familiar with the matter, as the coronavirus outbreak cripples customer demand.The company’s pre-IPO financing round -- a private fundraising effort that started late last year -- also hasn’t been completed, said the people, who asked not to be named because the information is private. The IPO had been expected to take place in the first half of the year.Shares of 58.com Inc. fell 4.9% in New York trading, the biggest decline since September.The 58 Home’s move adds to the list of IPO setbacks amid the virus outbreak. Restaurant operator Daikiya Group Holdings Ltd. on Wednesday canceled its first-time share sale in Hong Kong, while Chinese biotech firm InnoCare Pharma Ltd. has postponed investor meetings for its planned listing in the financial hub.Read: Virus Hits World’s No.1 IPO Market as Investor Meetings ScrappedThe virus has killed at least 1,355 people in China as of Thursday. People across the nation have been minimizing personal contact for fear of contracting the disease, hurting 58 Home’s on-demand services including part-time cleaners and home handymen.“Obviously, the virus outbreak has affected home and cleaning services -- that entire sector has almost been brought to a standstill,” 58 Home said in a statement. “Our short-term revenue will be affected.”The firm declined to comment on its IPO and fundraising plans.The company added it is facing a severe shortage of maids, and 30 million people in the home and cleaning-services sectors could lose their jobs if the outbreak continues.Workers StrandedMany workers are still stranded in their hometowns, where they traveled for Lunar New Year celebrations, and haven’t been able to return to major cities after the authorities curtailed travel to try to contain the virus.To ensure the health of maids who work on its platform, 58 Home has been logging their travel history, and offering masks and temperature checks.Locally known as 58 Daojia, the company has been seeking funds to bankroll an expansion into China’s competitive online services arena. It was aiming for a valuation of as much as $2 billion in a U.S. IPO.58 Home is one of China’s leaders in helping people connect online with services from flower delivery to home cleaning. Backed by Tencent Holdings Ltd., it’s vying against deeper-pocketed rivals such as Meituan Dianping and businesses operated by e-commerce leader Alibaba Group Holding Ltd. All are targeting a slice of a market for physical, on-demand services that are being disrupted by online technology.58.com’s unit raised its last private funding round in 2015, garnering $300 million from investors including Alibaba, KKR & Co. and Ping An Group. Parent 58.com holds 68.8% of the company’s equity interest but doesn’t consolidate the unit’s financials in its own results, according to its annual filing.(Updates to add 58.com Inc. share price in third paragraph)To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net;Dong Cao in Beijing at dcao59@bloomberg.netTo contact the editors responsible for this story: Candice Zachariahs at czachariahs2@bloomberg.net, Peter Vercoe, Fion LiFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Bloomberg

    Alibaba Warns Virus Having Broad Impact on Chinese Economy

    (Bloomberg) -- Alibaba Group Holding Ltd. warned that the coronavirus responsible for killing more than 1,300 people in China is exerting a fundamental impact on the country’s consumers and merchants, and will hurt its revenue growth in the current quarter.Alibaba, the first major Chinese technology corporation to report results since the epidemic emerged in January, said the virus is undermining production in the economy because many workers can’t get to or perform their jobs. It has also changed buying patterns with consumers pulling back on discretionary spending, including travel and restaurants.The Chinese e-commerce giant made the comments after reporting strong financial results for the quarter that ended in December. Revenue surged a better-than-expected 38% to 161.5 billion yuan ($23.1 billion), while net income rose 58% to 52.3 billion yuan.But Chief Executive Officer Daniel Zhang and Chief Financial Officer Maggie Wu were clear about the fallout from the deadly virus on employees, suppliers and merchants. Many merchants that work with the company have not been able to return to normal operations because of a shortage of employees. Alibaba’s U.S.-listed shares slid 1.8% Thursday.“The epidemic has negatively impacted the overall China economy, especially the retail and service sectors,” said Wu in a conference call after the results. “While demand for goods and services is there, the means of production in the economy has been hampered by the delayed opening of offices, factories and schools after the Lunar New Year’s holiday.”Asked about the affect on Alibaba, she voiced caution about giving estimates because it’s only halfway through the March quarter.“Overall revenue will be negatively impacted,” she said, adding that the hit to growth could be “significantly” negative.Zhang said that they are seeing relatively large changes in buying patterns. While food delivery is growing, areas like clothing and electronics are running into logistical problems. He warned that the core e-commerce business suffered a negative impact in the first two weeks after the holiday. Restaurant orders and travel bookings have also taken hits, hurting its Ele.me delivery and Alitrip businesses..“It will present near term challenges to Alibaba’s businesses across the board,” he said on the conference call, adding that there will also be opportunities.Alibaba is rolling out special programs to support merchants, including lowering the fees it charges and providing subsidies for delivery personnel. Zhang said the company is trying to keep its own staff safe, including having many work from home.Zhang said that more workers are going back to work in Beijing, Guangzhou and Shenzhen. Many logistic companies are also recovering their capacity in the past 12 days.China’s economy -- which had been showing signs of stabilization after a rough year buffered by the U.S. trade war -- has been hammered by the virus and measures to prevent its spread. Economists have been lowering their growth forecasts for the first quarter and the full year with factories shuttered, supply chains disrupted and consumers reluctant to go outside for fear of contagion.Bloomberg Economics’s scenario analysis suggests China’s first-quarter GDP growth could slow to 4.5% year on year -- a record low. “If that happens, a period of weaker imports will transmit the shock to trade partners,” according to Chief Economist Tom Orlik.Already, China’s most valuable corporation has struggled to sustain growth rates during an economic slowdown in its home market. While widespread home confinement is spurring demand for online services from grocery delivery to office apps to streaming entertainment, the disease is snarling nationwide transport and threatens in the long run to dent the consumer spending Alibaba depends on.The disruption to Alibaba’s business from the virus “may be worse than feared,” wrote Bloomberg Intelligence analysts Vey-Sern Ling and Tiffany Tam in a report. “Alibaba’s sales may contract in its core China retail marketplaces and local services business in the coming quarter even if the coronavirus outbreak subsides, as logistic and production disruptions faced by merchants could take time to resolve.”This week, the company declared a waiver of some service fees for merchants on its main direct-to-consumer Tmall platform to help those struggling with the fallout from the outbreak. That may further depress the top-line in 2020.“It was always thought that Alibaba’s core commerce revenue would have the brakes applied to it either because of China’s macroeconomic condition, or slower user growth,” said Michael Norris, research and strategy manager at Shanghai-based consultancy AgencyChina. “But what this coronavirus event forces us to do is to consider a third scenario -- where Alibaba’s revenue will take a hit from a reduction in merchant fees and advertising spend.”Alibaba has shed 1.4% of its value since a broader Chinese selloff began in January, underperforming arch-rival Tencent Holdings Ltd., which as a mobile gaming and social media operator is better shielded in the short run from the epidemic.Read more: Coronavirus Outbreak Drives Demand for China’s Online Grocers(Updates with analyst comment in penultimate paragraph)\--With assistance from Malcolm Scott.To contact the reporters on this story: Lulu Yilun Chen in Hong Kong at ychen447@bloomberg.net;Kari Lindberg in Hong Kong at klindberg13@bloomberg.net;Zheping Huang in Hong Kong at zhuang245@bloomberg.netTo contact the editors responsible for this story: Peter Elstrom at pelstrom@bloomberg.net, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

  • Tesla News, Nvidia Earnings Preview & Buy this Cheap Tech Stock - Free Lunch
    Zacks

    Tesla News, Nvidia Earnings Preview & Buy this Cheap Tech Stock - Free Lunch

    Coronavirus updates send stocks down. Big Tesla news. Earnings results from the likes of Alibaba. What to expect from Nvidia. And why Perion Network Ltd (PERI) is a Zacks Rank 1 (Strong Buy) stock right now...

  • Coronavirus update: Outlook darkens as cases spike in China, U.S. confirms 15th case
    Yahoo Finance

    Coronavirus update: Outlook darkens as cases spike in China, U.S. confirms 15th case

    An overnight spike of nearly 15,000 in China’s reported coronavirus cases upended world markets on Thursday.

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