BABA Jan 2022 310.000 call

OPR - OPR Delayed price. Currency in USD
6.05
0.00 (0.00%)
As of 3:40PM EDT. Market open.
Stock chart is not supported by your current browser
Previous close6.05
Open6.05
Bid5.95
Ask6.35
Strike310.00
Expiry date2022-01-21
Day's range6.05 - 6.05
Contract rangeN/A
Volume3
Open interest277
  • Alibaba extends its reach in China as coronavirus outbreak opens doors
    Reuters

    Alibaba extends its reach in China as coronavirus outbreak opens doors

    Alibaba Group Holding Ltd is emerging as one of China's biggest corporate winners of the coronavirus crisis, gaining the opportunity to expand its businesses and solidify its status as a critical part of the country's socio-economic engine. While many companies are hurting from disruption caused by the virus, Alibaba has seen traffic at its online marketplaces shoot higher and demand grow for services like food delivery. The company, which emerged as China's leading e-commerce company after the 2003 SARS outbreak, is now positioning itself as a hirer and a lender too, advertising for over 100,000 jobs and offering billions of dollars in loans to small and mid-sized enterprises (SMEs) at a time when many others are retrenching.

  • Bloomberg

    SoftBank’s Vision Fund Is Planning to Cut 10% of Staff

    (Bloomberg) -- SoftBank Group Corp.’s Vision Fund is planning deep cuts in staffing after reporting about $18 billion in losses from the declining value of its startups, according to people familiar with the matter.The reductions could affect about 10% of the fund’s workforce of roughly 500, said two of the people, who asked not to be identified discussing personnel decisions. The Vision Fund’s headquarters are in London, with additional operations in Tokyo and California. The cuts will be across all levels of staff, said one person.A spokesman for the Vision Fund declined to comment.SoftBank founder Masayoshi Son and his $100 billion Vision Fund changed the tech industry by handing out enormous checks to relatively unproven startups. But the fund went from SoftBank’s main profit contributor a year ago to its biggest drag on earnings. It lost 1.9 trillion yen ($17.7 billion) last fiscal year after writing down the value of investments, including WeWork and Uber Technologies Inc.Son originally said he hoped to raise a new Vision Fund every two to three years, but he has conceded he can’t attract money now because of the poor performance. The fund, led by Rajeev Misra, operates as a SoftBank affiliate with most of the money coming from limited partners, led by Saudi Arabia’s Public Investment Fund and Abu Dhabi’s Mubadala Investment Co.“It makes sense that SoftBank is cutting positions at the Vision Fund as they are in an extremely difficult situation, and they may start targeting highly paid workers to cut costs,” said Koji Hirai, head of M&A advisory firm Kachitas Corp. in Tokyo.The Vision Fund grew rapidly after launch three years ago as Misra recruited scores of people from the finance industry, including many of his former colleagues from Deutsche Bank. Among its managing partners are several of the German bank’s ex-employees, including Colin Fan, former co-head of its investment banking division.The fund also set up an unusual compensation structure that includes a $5 billion loan to employees. The debt is swapped for equity in the fund and generates profit when deals make money -- and losses when they don’t, scaled by seniority, people familiar with the matter have said. The poor performance so far, along with the layoffs, may prompt some employees to look for other positions.“One side effect is that the best people at SoftBank may exit to find better funds,” said Hirai. “If so, their fund business may become even worse, sliding down from a slope.”The Vision Fund has struggled since WeWork botched its efforts to go public last year and SoftBank stepped in to bail the company out. The Vision Fund currently manages more than 80 portfolio companies, but Son expects about 15 of the fund’s startups will likely go bankrupt while predicting another 15 will thrive.“Vision Fund’s results are not something to be proud of,” Son said earlier this month as he announced record losses. “If the results are bad, you can’t raise money from investors. Things aren’t good, that’s why we are investing with our own money.”The fund has already unwound some investments, including selling a nearly 50% stake in dog-walking startup Wag Labs back to the company last year. Son has said he plans to sell off about $42 billion in assets to finance stock buybacks and pay down debt.SoftBank disclosed it’s unloading some shares in Alibaba Group Holding Ltd. and is in talks to sell about $20 billion of T-Mobile US Inc., Bloomberg News reported. It’s also exploring a deal for its minority stake in industrial software maker OSIsoft LLC that could be worth $1.5 billion.SoftBank shares, after plummeting in March, have recovered and are little changed for the year. The stock rose just more than 1% in Tokyo trading.One emerging question is how Alibaba -- SoftBank’s most valuable holding -- will be affected by the clash between the U.S. and China. A bill just approved by the U.S. Senate could force Chinese companies like Alibaba to stop trading their shares on U.S. exchanges.“The big picture is SoftBank is caught up with U.S.-China conflict right now, and SoftBank may need to conduct a drastic restructuring if Alibaba was delisted from New York,” said Hirai. “Its main banks and the capital markets are anxiously awaiting an outcome for the situation.”(Updates with additional details starting in the first paragraph.)For 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.

  • Alibaba Hunts for a Million Influencers Keen to Make Big Money
    Bloomberg

    Alibaba Hunts for a Million Influencers Keen to Make Big Money

    (Bloomberg) -- Alibaba Group Holding Ltd. pioneered the use of live-streaming hosts to sell everything from lipstick to smartphones in China. Now, the e-commerce giant wants to repeat that success globally with the help of a million influencers on forums from TikTok to Instagram.AliExpress, the company’s online marketplace for shoppers outside China, is on the hunt for social media personalities to hawk wares on its online malls around the world. It’s looking to attract more than 100,000 content creators this year to its recently launched AliExpress Connect, rising to over a million in three years. The platform offers a matchmaking service, helping pair social media influencers with brands and merchants looking to market their products. Its initial focus is Europe, where Russia, France, Spain and Poland comprise the majority of users.Alibaba hopes to replicate the success it’s enjoyed with so-called key opinion leaders driving sales on its China online marketplace Taobao. “For both Taobao and AliExpress, social content is a way to diversify offerings, but not to generate revenue,” Yuan Yuan, head of operations for AliExpress, told Bloomberg News. Influencers will help users stick with the platform instead of just making a one-time purchase. “The goal is to accumulate users, keep them there and encourage them to remain active.”China’s largest e-commerce company currently gets just a fraction of its retail revenue from outside its home country, but it’s harbored bigger international ambitions for years. The move marks Alibaba’s latest global push and comes at a time when Covid-19 is fueling an unprecedented boom in social media. The company’s rivals, including TikTok proprietor ByteDance Ltd. and Tencent-backed Pinduoduo Inc., are playing catch-up in live streaming and other means of social commerce championed by the Taobao Live app.Global social giants like Facebook Inc. have also added new features that support online shopping. In the U.S., more than 75 million social-network users aged 14 or older are expected to make at least one online purchase this year, up over 17% from 2019, according to research firm eMarketer.Influencers and content creators can sign up for Connect using TikTok, Instagram, Facebook and other social accounts. They can then solicit assignments from AliExpress merchants seeking help in promoting their goods or services. This gives the influencer options, from merely reposting the seller’s social media posts to creating original videos. Commission fees can be based on the sales the influencers generate.AliExpress is one of two Alibaba online bazaars for international buyers, the other being the Southeast-Asia-focused Lazada. AliExpress merchants are mainly small, export-oriented businesses in China, but global brands like Samsung and Oral-B have increasingly set up shop on the platform, targeting regional markets. Its top consumer markets include Russia, the U.S., Brazil and Spain.Yuan said AliExpress aims to help at least 100 of its army of a million influencers earn an annual income of more than $1 million within three years. “Only if they can make money will they be motivated to create good content for our platform,” she said.For 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.

  • These 4 Chinese Stocks Are Too Risky to Own
    Motley Fool

    These 4 Chinese Stocks Are Too Risky to Own

    Luckin Coffee and three other Chinese stocks could be in the blast zone of newly proposed regulations.

  • Did Pinduoduo Just Prove the Bears Wrong?
    Motley Fool

    Did Pinduoduo Just Prove the Bears Wrong?

    Pinduoduo's (NASDAQ: PDD) stock recently surged to an all-time high after the company posted its first-quarter earnings. The Chinese e-commerce company's revenue rose 44% annually to 6.54 billion yuan ($924 million), beating estimates by $189 million but marking its slowest growth rate since its IPO.

  • ByteDance Hit $3 Billion in Net Profit Last Year
    Bloomberg

    ByteDance Hit $3 Billion in Net Profit Last Year

    (Bloomberg) -- TikTok’s parent ByteDance Ltd. generated more than $3 billion of net profit on over $17 billion in revenue last year, figures that show the world’s most valuable startup is still growing at a brisk rate, according to people familiar with the matter.The revenue for last year was more than double the company’s tally of about $7.4 billion in 2018, propelled by phenomenal growth in user traffic that’s drawn advertisers away from Tencent Holdings Ltd. and Baidu Inc. The people asked not to be identified because the financial details are private.ByteDance has emerged as one of the tech industry’s most surprising success stories, an innovative Chinese company that is challenging the global dominance of U.S. internet giants. It draws some 1.5 billion monthly active users to a family of apps that includes the TikTok short-video platform, its Chinese twin Douyin and the news service Toutiao. This month, the company poached Walt Disney Co. streaming czar Kevin Mayer to become chief executive officer of TikTok.The company owes much of its success to TikTok, now the online repository of choice for lip-synching and dance videos by American teens. The ambitious company is also pushing aggressively into a plethora of new arenas from gaming and search to music. ByteDance could fetch a valuation of between $150 billion and $180 billion in an initial public offering, a premium relative to sales of as much as 20% to social media giant Tencent thanks to a larger global footprint and burgeoning games business, estimated Ke Yan, Singapore-based analyst with DZT Research.“None of the Chinese tech companies has achieved this level of success in the global market before ByteDance,” he said, adding neither social media company harbors much debt. “The fact that ByteDance is making profit, if true, and sitting on a $6 billion cash pile means that it is not in a rush at all to come to market to raise capital, and therefore less likely to offer the shares at a more reasonable price for IPO investors.”ByteDance, led by Zhang Yiming, is becoming a viable rival to the dominant American online behemoths, Facebook Inc. and Alphabet Inc. Facebook unit Instagram brought in about $20 billion in advertising revenue in 2019, Bloomberg previously reported. Google said its video unit YouTube recorded $15.1 billion in ad sales last year.ByteDance representatives didn’t respond to a request for comment.That success has come despite American lawmakers raising concerns about privacy and censorship. In a rare bipartisan effort in Washington, Republican Senator Tom Cotton and Senate Minority Leader Chuck Schumer last year urged an investigation into TikTok, labeling it a national security threat.President Donald Trump on Wednesday threatened to regulate or shut down social media companies, tweeting that the platforms attempt to silence conservative voices. Twitter Inc. on Tuesday added a fact-checking link to two of Trump’s tweets to his 80 million followers.ByteDance is strengthening its operations in newer arenas such as e-commerce and gaming. This year, it kicked off a wave of hiring and envisions hitting 40,000 new jobs in 2020, hoping to match headcount of e-commerce giant Alibaba Group Holding Ltd. at a time technology corporations across the globe are furloughing or reducing staff.The company had very preliminary discussions about an initial public offering last year, but is in no rush to go public given its financial performance, people have said. It now has more than $6 billion of cash on hand, the people said.ByteDance, which is backed by SoftBank Group Corp., General Atlantic and Sequoia, is already the world’s most valuable startup, according to researcher CB Insights. Some private trades recently valued the Chinese company between $105 billion and $110 billion on the secondary markets, Bloomberg News previously reported. It has also traded as high as $140 billion, one person said, making it one of the most highly valued private companies of all time.(Updates with Trump tweets in ninth paragraph.)For 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

    A Tech Billionaire May Find Use in a Cold War

    (Bloomberg Opinion) -- Is India’s richest man betting on a tech cold war?Petrochemicals czar Mukesh Ambani plans to list his fledgling digital business overseas, Bloomberg News reported Tuesday, citing people with knowledge of Jio Platforms Ltd.’s initial public offering, which is planned for the next 12 to 24 months.Going to the New York Stock Exchange or Nasdaq would make sense. U.S.-traded Chinese technology firms such as JD.com Inc. and NetEase Inc. are looking for an alternative home closer to the mainland in case tensions between Washington and Beijing escalate, as my colleague Nisha Gopalan wrote this week. Alibaba Group Holding Ltd. held a secondary listing in Hong Kong in November. With Washington considering a range of sanctions against Chinese officials and firms as punishment for Beijing’s crackdown on Hong Kong, now may be the perfect time to pitch American investors on the potential of the other internet market with a billion-plus people.A splashy overseas foray will be an unusual step for a family that brought the retail equity culture to India. Dhirubhai Ambani, Mukesh’s late father who founded the empire, booked a football stadium in Mumbai in 1985 to hold a shareholders’ meeting for the polyester textile maker that he had floated eight years earlier. But then, Mukesh Ambani is already moving old furniture around as he pivots flagship Reliance Industries Ltd. away from an oversupplied energy and chemicals market. At the same time, he’s beefing up the balance sheet after a seven-year, $100 billion debt-fueled expansion. A big chunk of that was for Jio, the wireless carrier that has become India’s largest in less than four years.A $7 billion rights issue, Reliance’s first in three decades, buttressed by more than $10 billion raised in a month from the sale of shares in unlisted Jio Platforms may help cut the company’s $20 billion of net debt to zero before Ambani’s March 2021 target. A U.S. IPO should give Jio’s new backers, including Facebook Inc., KKR & Co., Silver Lake Partners and General Atlantic, a better valuation in a capital market that’s deeper than Mumbai’s.Will Wall Street be so hospitable as to give Ambani, say, a $100 billion valuation?  (Alibaba, a more mature business, was valued at $168 billion six years ago.) Jio Platforms, which is centered on the the 4G mobile network, is the cornerstone of Reliance’s emerging triple play on carriage, content and commerce. With almost 400 million customers under his belt, Ambani needs to prove he can garner at least $3 from each of them every month. Modest as that sounds, it isn’t an easy task when per-user revenue is at present only a little over half as much. The coronavirus lockdown has ravaged India’s economy, setting its growth prospects back perhaps by several years. Mass market consumers, who comprise Jio’s user base, have been badly hurt.That’s where a tech cold war may help. Wall Street investors have been able to profit from the explosion of e-commerce in China, even though the likes of Facebook and Amazon.com Inc. are largely shut out of the People’s Republic. If that access gets curbed by geopolitics, then Ambani’s story becomes more compelling. He can offer the vision of a vast retail network that has Facebook’s popular WhatsApp messaging system processing orders and payments for neighborhood shops connected digitally to a billion-plus buyers. That could be a big draw. A U.S. home is within Ambani’s reach, especially if Chinese firms are forced to vacate.  This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Andy Mukherjee is a Bloomberg Opinion columnist covering industrial companies and financial services. He previously was a columnist for Reuters Breakingviews. He has also worked for the Straits Times, ET NOW and 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 Vision Fund to Explore Sale of OSIsoft Stake
    Bloomberg

    SoftBank’s Vision Fund to Explore Sale of OSIsoft Stake

    (Bloomberg) -- SoftBank Group Corp. is exploring a sale of a minority stake in OSIsoft LLC that could be worth more than $1.5 billion, according to people familiar with the matter.SoftBank is working with a financial adviser to sell the stake in the industrial software company, which is held by its Vision Fund, said the people, who asked to not be identified because the matter isn’t public. The move is part of SoftBank’s new focus on raising cash, they said.The Japanese firm’s plans aren’t final and it could opt to keep the stake, the people said.Representatives for the Vision Fund and OSIsoft declined to comment.SoftBank Chief Executive Officer Masayoshi Son has said he would sell off about $42 billion in assets to finance stock buybacks and pay down debt. SoftBank disclosed it’s selling shares in Alibaba Group Holding Ltd. and it’s in talks to sell about $20 billion of T-Mobile US Inc., Bloomberg News reported.SoftBank’s Vision Fund has unwound some investments, including dumping its entire stake in chipmaker Nvidia Corp. in February 2019. The fund, which has made bets on companies like WeWork that have cratered, sold a nearly 50% stake in dog walking startup Wag Labs back to the company last year.San Leandro-California based OSIsoft sells software into sectors including oil and gas, utilities and pharmaceutical development, according to its website.SoftBank acquired a “significant minority stake” in the company in 2017 from backers including Kleiner Perkins Caufield & Byers and TCV, according to a statement. Its investment was worth a bit less than $1 billion, a person familiar with the matter said at the time.For 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.

  • Top Analyst Reports for Alibaba, Chevron & Shopify
    Zacks

    Top Analyst Reports for Alibaba, Chevron & Shopify

    Top Analyst Reports for Alibaba, Chevron & Shopify

  • Alibaba Tops Fiscal Q4 Earnings: ETFs in Focus
    Zacks

    Alibaba Tops Fiscal Q4 Earnings: ETFs in Focus

    Alibaba beat earnings and revenue expectations while expects revenue growth to slow this year.

  • Could Alibaba Be a Millionaire Maker Stock?
    Motley Fool

    Could Alibaba Be a Millionaire Maker Stock?

    The Chinese tech giant will overcome its near-term challenges and generate even bigger returns over the next few decades.

  • Chinese Delivery Mogul’s Wealth Doubles to $10 Billion in Months
    Bloomberg

    Chinese Delivery Mogul’s Wealth Doubles to $10 Billion in Months

    (Bloomberg) -- Meituan Dianping founder Wang Xing’s fortune has nearly doubled since his company emerged from the depths of China’s Covid-19 lockdown, cementing his place among a generation of the country’s most prominent tech entrepreneurs.Meituan’s stock climbed 10.4% on Tuesday after it reported better than expected revenue, driving its market value past $100 billion for the first time and stoking hopes the world’s largest meal delivery business will bounce back as China regains its footing. Based on his 11.3% slice of the company, the chief executive officer’s wealth has soared since Meituan plumbed a low on March 19 to about $10.3 billion as of Tuesday.Backed by Tencent Holdings Ltd., Meituan’s sprawling services from food delivery to hotel booking helped establish the company as one of a coterie of upstart challengers to incumbent tech leaders, Alibaba Group Holding Ltd. and Tencent itself. Meituan’s businesses -- among the most vulnerable to a nationwide shutdown -- began to climb out of a trough in April and May, offsetting slumps in harder-hit areas such as hotels. As of March’s final week, more than 70% of restaurants surveyed had recovered over half their normal order volumes, while 30% had exceeded pre-pandemic levels, Wang told analysts on a call Monday.Wang relied on deals and expansion to turn what started as a Groupon-type service into a food delivery giant that now also spans food reviews and in-store dining services. A computer engineer by training, Wang -- whose role model is Amazon.com Inc. founder Jeff Bezos -- is putting growth ahead of the bottom line to secure Meituan’s place among China’s pantheon of tech giants. He’s part of a new generation of up-and-comers, along with fellow billionaires like ByteDance Ltd.’s Zhang Yiming and Didi Chuxing’s Cheng Wei.“Looking into the next three quarters, we believe there will still be challenges as there are still uncertainties and potential downside from the ongoing evolution of the COVID-19 situation,” Wang said on the call. “Meanwhile, a large number of local service merchants are still struggling for survival. Short-term profitability is not our top priority.”Read more: The Greatest Delivery Empire on Earth Has Alibaba’s AttentionMeituan’s stock surge came after it reported better-than-expected sales of 16.8 billion yuan ($2.4 billion) in the three months ended March. Morgan Stanley and CICC were among the brokerages that subsequently lifted their targets on the company, citing resilience across business lines and easing competition.“COVID-19 had a negative impact on Meituan but results beat on top-line and bottom line by a wide margin,” Bernstein analysts led by David Dai wrote. In food delivery, the “long run potential is still there and the profitability level can be much higher” after the company pushes advertising, they added.Longer term, the internet services giant will have to grapple with China’s worsening economy, which may further dent consumer spending. Subsidies and measures to help restaurants and merchants during the outbreak will again pressure profitability in the June quarter, executives said. Meituan reported a lower-than-projected net loss of 1.58 billion yuan, but that was after three successive quarters of profit.What Bloomberg Intelligence SaysMeituan’s near-term growth may weaken as its in-store dining, hotel and travel businesses take time to fully recover from China’s coronavirus outbreak. Operating efficiency will likely improve in the longer term as the company expands its market-leading scale and competition with Alibaba moderates. Broadening service categories and providing technology solutions for merchants will aid sales and profit growth.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Before the outbreak, Meituan had pushed aggressively into adjacent arenas from online travel to ride-hailing. While revenue from the business that encompasses hotels and travel plunged 31% during the March quarter, Meituan’s much smaller new initiatives segment -- which includes bike- and car-hailing -- grew sales 4.9%, aided by the launch of a new grocery delivery service. Hotels remained hardest-hit: in the week of May 11, domestic room nights were at about 70% pre-pandemic levels.While Meituan is expanding offerings to sell things like handsets and farm produce, rivals including Ant Group and SF Express, both backed by Alibaba Group Holding Ltd., are elbowing their way into Meituan’s core takeout business. Alibaba’s food-delivery arm Ele.me is also engaging in a subsidy battle with the startup for market leadership.For 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.

  • Food Delivery Giant Meituan’s Sales Beat Estimates
    Bloomberg

    Food Delivery Giant Meituan’s Sales Beat Estimates

    (Bloomberg) -- Meituan Dianping’s shares soared after it reported a smaller than expected 13% slide in revenue that drove hopes the world’s largest meal delivery business is starting to recover as China emerges from Covid-19 lockdowns.Its shares climbed as much as 9.7%, extending strong gains since China began to return to normal in mid-March and propelling Meituan’s market value to more than $100 billion. That surge came after Meituan reported better-than-expected sales of 16.8 billion yuan ($2.4 billion) in the three months ended March. Morgan Stanley and CICC were among the brokerages that lifted their targets on Meituan, citing resilience across business lines and easing competition.Backed by Tencent Holdings Ltd., Meituan’s sprawling services from food delivery to in-store dining and hotel booking were among the most vulnerable to nationwide shutdowns. But its businesses had begun to climb out of the trough, offsetting severe slumps in areas such as hotels, executives told analysts on a Monday conference call. As of March’s final week, more than 70% of restaurants surveyed had recovered more than half their normal order volumes, while 30% had exceeded pre-pandemic levels, Chief Executive Officer Wang Xing said.“COVID-19 had a negative impact on Meituan but results beat on top-line and bottom line by a wide margin,” Bernstein analysts led by David Dai wrote. In food delivery, the “long run potential is still there and the profitability level can be much higher” after the company pushes advertising, they added.Longer term, the internet services giant will have to grapple with China’s worsening economy, which may further dent consumer spending. Subsidies and measures to help restaurants and merchants during the outbreak will again pressure profitability in the June quarter, executives said.Meituan reported a lower-than-projected net loss of 1.58 billion yuan, but that was after three successive quarters of profit.“Looking into the next three quarters, we believe there will still be challenges as there are still uncertainties and potential downside from the ongoing evolution of the COVID-19 situation,” Wang said on the call. “Meanwhile, a large number of local service merchants are still struggling for survival. Short-term profitability is not our top priority.”What Bloomberg Intelligence SaysMeituan’s near-term growth may weaken as its in-store dining, hotel and travel businesses take time to fully recover from China’s coronavirus outbreak. Operating efficiency will likely improve in the longer term as the company expands its market-leading scale and competition with Alibaba moderates. Broadening service categories and providing technology solutions for merchants will aid sales and profit growth.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Before the outbreak, Meituan had pushed aggressively into adjacent arenas from online travel to ride-hailing. While revenue from the business that encompasses hotels and travel plunged 31% plunge during the March quarter, Meituan’s much smaller new initiatives segment -- which includes bike- and car-hailing -- grew sales 4.9%, aided by the launch of a new grocery delivery service. Hotels remained hardest-hit: in the week of May 11, domestic room nights were at about 70% pre-pandemic levels.While Meituan is expanding offerings to sell things like handsets and farm produce, rivals including Ant Group and SF Express, both backed by Alibaba Group Holding Ltd., are elbowing their way into Meituan’s core takeout business. Alibaba’s food-delivery arm Ele.me is also engaging in a subsidy battle with the startup for market leadership.(Updates with target increases by brokerages in second paragraph)For 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.

  • Hong Kong Finance Has a Security Blanket
    Bloomberg

    Hong Kong Finance Has a Security Blanket

    (Bloomberg Opinion) -- China’s decision to impose a national security law on Hong Kong has spurred speculation of capital flight and an erosion of the city’s status as an international financial center. As a venue for share offerings, at least, the near-term future is looking bright. For that, the territory can thank worsening U.S.-China relations.U.S.-listed Chinese technology companies are lining up to sell stock in Hong Kong, seeking refuge from an environment that has become increasingly less hospitable. Nasdaq-traded JD.com Inc. and NetEase Inc. are planning secondary listings in the city next month, following a trail blazed by Alibaba Group Holding Ltd. in November. Optimism that more companies will join them drove shares of Hong Kong’s exchange operator up more than 6% on Monday.There’s every reason to expect these stock offerings to do well, and push Hong Kong back up the rankings of the world’s largest fundraising centers. So far this year, the city is the sixth-largest market by capital raised. It topped the table for the whole of 2019 when New York-listed Alibaba sold $13 billion of stock, underscoring the existence of a strong local investor base for China’s most successful companies.The reception for Alibaba suggests that Asian institutional investors want to be able to trade China’s leading enterprises in their own time zone. JD and NetEase are also among the nation’s technology champions. Beijing-based JD competes with Alibaba in e-commerce, while Hangzhou-based NetEase is behind some of the most popular mobile games in China. Beyond these two, search-engine operator Baidu Inc. is considering delisting from Nasdaq and moving to an exchange nearer home, Reuters reported last week. The coronavirus has exacerbated tensions between Washington and Beijing, while scandals such as fabricated sales at Luckin Coffee Inc. have spurred politicians to push for tighter regulation, giving Chinese companies an incentive to list elsewhere.Hong Kong is an obvious choice. The city burnished its appeal for U.S.-traded companies last week when the compiler of the city’s benchmark Hang Seng Index said it would change its rules to admit secondary listings and companies with dual-class share structures. Stocks that join the benchmark can expect inflows from passive investors such as exchange-traded funds that track the index.Citigroup Inc. reckons that 23 of the 249 Chinese stocks traded in the U.S. meet Hong Kong’s criteria for a secondary listing, which require companies to have a market value of $5.2 billion or, alternatively, a combination of $129 million in annual sales and a $1.3 billion market cap. JD tops the group with a value of $73 billion.An even more alluring prize would be inclusion of secondary listings in Hong Kong’s stock-trading links with the Shanghai and Shenzhen exchanges, which would enable mainland Chinese investors to buy these shares. Alibaba wasn’t included in the stock connect, to the disappointment of some investors. China’s government could yet decide to make this happen.It’s a reminder that Beijing has levers at its disposal to help shore up Hong Kong’s economy and financial industry, which accounts for a fifth of the city’s gross domestic product — as it did after the SARS epidemic in 2003, when half a million people demonstrated against the Hong Kong government’s first, aborted attempt to introduce national security legislation. Hong Kong Exchanges & Clearing Ltd. surged the most in 18 months Monday even as unrest returned to the city. Listing of American depositary receipts may double the exchange operator’s revenue, Morgan Stanley said. The Hang Seng Index, meanwhile, stabilized after slumping 5.6% on Friday.An exodus of businesses, people and capital may yet imperil Hong Kong’s role as an international financial center. The IPO outlook suggests that, rather than a sudden demise, that’s likely to be a long drawn-out process.  This column does not necessarily reflect the opinion of the editorial board or 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.

  • Alibaba Drops After Projecting Slowing Growth in Uncertain Times
    Bloomberg

    Alibaba Drops After Projecting Slowing Growth in Uncertain Times

    (Bloomberg) -- Alibaba Group Holding Ltd. slid after projecting revenue growth will slow this year, reflecting post-Covid 19 economic uncertainty at home as well as the potential for U.S.-Chinese tensions to disrupt its business.Its stock slid as much as 4% in Hong Kong Monday, after a drop of almost 6% in New York before the weekend. The e-commerce giant forecast sales growth this year of at least 27.5% to more than 650 billion yuan ($91 billion), down from 35% previously and slightly below analysts’ estimates. While it posted a better-than-expected 22% rise in March quarter revenue of 114.3 billion yuan, that marked its slowest pace of expansion on record.Online shopping began to bounce back from March, executives said Friday. But the tepid outlook demonstrates the world’s second-largest economy has yet to fully shake off Covid-19, with consumers still hesitant about spending on big-ticket items. Asia’s most valuable corporation is tackling also the rise of rivals such as ByteDance Ltd. and Pinduoduo Inc. And the Tmall operator is going head-to-head with Tencent Holdings Ltd. for internet leadership in everything from online media to payments and cloud computing. JD.com Inc., the No. 2 Chinese online retailer, forecast better-than-expected revenue this quarter.“The market is a bit disappointed despite the strength given 2Q guidance of 20-30% YoY growth for JD and 99% GMV growth in 1Q20 for PDD,” CICC analyst Natalie Wu wrote. “We regard Alibaba’s advantage as a market leader as intact and unchanged in the longer run, though it may take several quarters for market sentiment to swing back.”Read more: Alibaba Sales Growth Plumbs New Lows While Uncertainty EscalatesAlibaba has lost more than $70 billion of market value since the coronavirus first erupted in January, and now has to grapple with not just an uncertain global economic environment but also any potential fallout from U.S.-Chinese financial tensions. On Friday, executives sought to assuage concerns about a U.S. bill that mandates much closer accounting scrutiny of U.S.-listed Chinese companies and may bar them from American bourses.Chief Financial Officer Maggie Wu said Friday Alibaba’s financial statements have been consistently prepared in accordance with U.S. GAAP accounting measures and were beyond reproach. “The integrity of Alibaba’s financial statements speak for itself, we have been an SEC filer since 2014 and hold ourselves to the highest standard,” she told analysts on a conference call. “We will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”The bigger short-term challenge is in reviving growth: Alibaba’s bread-and-butter customer management or marketing business grew just 3% in the March quarter. Much of that stems from weaker consumer sentiment during the coronavirus-stricken quarter, when total Chinese e-commerce rose just 5.9% or at less than a third of 2019’s pace, according to government data. Jefferies analysts led by Thomas Chong wrote that Alibaba’s guidance was in fact a positive when viewed against an array of uncertainties gripping the post-Covid 19 global economic environment.What Bloomberg Intelligence SaysUser engagement and transaction volume have rebounded in April and May to precrisis levels, which bodes well for normalized sales growth ahead, especially as merchant-support measures are gradually rolled back.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.Rival PDD posted a revenue rise of 44% on Friday, down sharply from 91% in the previous quarter but ahead of expectations. Its sales and marketing expenses jumped 49%. PDD’s shares climbed 15% Friday.Alibaba’s March-quarter net income was 3.2 billion yuan, down 88% from a year ago when it booked an 18.7 billion yuan one-time gain on investments. In February, Alibaba declared a waiver of some service fees for merchants struggling financially during the outbreak on its main direct-to-consumer Tmall platform. In April, the company rolled out a new 10-billion-yuan subsidy program for Tmall users to buy electronics, encroaching on JD.com’s traditional turf. These initiatives may further compress margins for the June quarter.“The challenging part is for them to achieve the same amount of growth this year,” said Steven Zhu, a Shanghai-based analyst with Pacific Epoch. “Just because they are too big, for the same amount of growth, they need to spend much more effort.”But executives were confident in a gradual e-commerce recovery over the year. Beyond its main business, younger divisions such as its cloud computing arm should buoy the bottom line. That division’s revenue jumped 58% in the quarter.“Despite a challenging quarter due to reduced economic activities in light of the COVID-19 pandemic in China, we achieved our annual revenue guidance,” Wu said in a statement. “Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen a steady recovery since March.”For 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

    Baidu Investors Fell Out of Love Years Ago

    (Bloomberg Opinion) -- Five years ago, Baidu Inc. founder and Chairman Robin Li sat down with Bloomberg News to explain how foreign investors were getting it wrong.Listed on the Nasdaq a decade earlier, shares of the Chinese search-engine provider had taken a beating over the prior year, and Li’s chief complaint was that Americans just didn’t appreciate the coming changes in its business. The trend in China was toward services like delivery and ride-hailing, as well as bookings for restaurants, beauty salons and doctors. This online-to-offline economy would eclipse search revenue, he predicted.Now, it seems that Li has lost patience. Baidu is looking into the possibility of delisting its shares from the Nasdaq and moving to an exchange closer to home, Reuters reported Friday, citing three people familiar with the matter. Baidu thinks it’s undervalued, according to the report.The backdrop to these discussions is rising hostility to U.S. investments in Chinese assets amid worsening relations between the two countries. The U.S. Senate passed a bill last week that would force companies to delist unless they can prove they’re not under the control of a foreign government.That sounds like a good excuse for Baidu to look for the exit. The reality is that investors lost patience with its management years ago. It was inevitable that the company would seek one day to list elsewhere, as Alibaba Group Holding Ltd. has already done. Baidu’s U.S.-traded stock fell 15% between that September 2015 interview and the end of last year, before the pandemic hit. Over the same period, Alibaba climbed 248%.Li’s problem is that his company failed to grasp the transformation he was talking up half a decade ago. While Alibaba and Tencent Holdings Ltd. have successfully moved into new areas like payments and physical retail, and upstarts like Meituan Dianping and Pinduoduo Inc. now dominate delivery and social-commerce, Baidu has barely changed.Its core business still centers on advertising and accounts for 73% of revenue, which climbed just 2% last year. Investments into new realms like artificial intelligence and autonomous driving have yet to bear fruit. Its other major sales contributor, iQiyi Inc., a video-streaming platform that listed separately on Nasdaq in March 2018, continues to lose money.Around the time that Li complained foreign investors weren’t getting it, some of his contemporaries decided to move home where they felt Chinese investors had a better understanding and would reward them with higher valuations. Internet security company Qihoo 360 Technology Co. was taken private by a consortium that included Citic Group for $9.3 billion in December 2015. It relisted in Shanghai in 2018 via the purchase of elevator maker SJEC Corp., and now trades under the name 360 Security Technology Inc. Chinese investors have soured on 360 Security, pushing the company’s market value down by more than a third since February. There’s a warning for Li. Investors in China won’t assign a higher valuation to a returning company unless it has a convincing growth story to tell. Baidu was a pioneer when it listed on Nasdaq in 2005, paving the way for dozens of Chinese internet stocks to follow. Touted as the Google of China, it symbolized the potential of the sector for American investors. Those days are long gone: Baidu has been eclipsed as China’s technology darling by fasting-growing companies such as Alibaba and Tencent.The problem for Li isn’t that investors don’t understand his business. It may be that they understand it too well.  This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.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.

  • Stock market news live updates: Stocks end mixed, but rise on the week, as US-China tensions mount
    Yahoo Finance

    Stock market news live updates: Stocks end mixed, but rise on the week, as US-China tensions mount

    Stocks edged down Friday morning as ongoing signs of the economic damage from the coronavirus pandemic compounded with fears of rising U.S.-China tensions. A slew of quarterly corporate earnings results came in mixed.

  • Bloomberg

    Alibaba Anticipates It Can Comply With U.S. Securities Rules

    (Bloomberg) -- Alibaba Group Holding Ltd. Chief Financial Officer Maggie Wu said the company is closely monitoring a U.S. bill that aims to delist foreign companies from the country’s stock exchanges and anticipates that it will be able to comply with any new regulations.Wu said the company “will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”The legislation, which was approved by the Senate Wednesday and is targeted at Chinese listings, would require companies to certify that they aren’t under the control of a foreign government. The new rules could mandate that Chinese companies hand over the original auditing documents, which could create some challenges because Chinese law restricts their distribution.In a conference call to discuss the company’s quarterly financial results, Wu said Alibaba has long worked within U.S. accounting rules and is audited by the Hong Kong arm of accounting firm PricewaterhouseCoopers LLP.She also pointed out that U.S. investors who bought Alibaba stock during the company’s 2014 initial public offering would have benefited handsomely. Alibaba’s shares are up 197% since then, compared with a 2% increase in the New York Stock Exchange Composite Index.The proposed law, which has bipartisan support and will next be reviewed by the House, comes as tensions escalate between American and Chinese officials. Alibaba Chief Executive Officer Daniel Zhang said Friday the rising political tensions have added another layer of uncertainty in the post-pandemic world.Alibaba has been plagued by years of Securities and Exchange Commission investigations and questioning from analysts about its financial structure and accounting practices since its U.S. IPO.Inquiries have focused on the consolidation of Alibaba’s businesses and related-party transactions including Ant Financial and its Cainiao Network logistics arm. The company has also been probed on how it calculates “gross merchandise volume,” a key metric to determine its e-commerce growth rate, and how it reports data from its Singles’ Day promotion.Alibaba on Friday reported its slowest pace of revenue growth on record, reflecting the impact of China’s economic contraction across its online marketplaces.Read more: Alibaba Sales Growth Plumbs New Low During China’s SlowdownThe Chinese e-commerce leader forecast growth in revenue this year of least 27.5% to more than 650 billion yuan ($91 billion), compared with the 657 billion yuan average analysts were projecting. Sales rose 22% to 114.3 billion yuan in the March quarter. Net income was 3.2 billion yuan, down from a year ago when it booked an 18.7 billion yuan one-time gain on investments.(Updates with Alibaba share gains in fifth paragraph.)For 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.

  • Alibaba Sales Growth Plumbs New Lows While Uncertainty Escalates
    Bloomberg

    Alibaba Sales Growth Plumbs New Lows While Uncertainty Escalates

    (Bloomberg) -- Alibaba Group Holding Ltd. expects revenue growth to slow this year, reflecting post-Covid 19 economic uncertainty at home as well as the potential for U.S.-Chinese tensions to disrupt its business.The e-commerce giant forecast sales growth this year of at least 27.5% to more than 650 billion yuan ($91 billion), down from 35% previously and slightly below analysts’ estimates. While it posted a better-than-expected 22% rise in March quarter revenue of 114.3 billion yuan, that marked its slowest pace of expansion on record. Alibaba’s shares slid more than 5% in New York.Online shopping began to bounce back from March, executives said Friday. But the tepid outlook demonstrates the world’s second largest economy has yet to fully shake off Covid-19, with consumers still hesitant about spending on big-ticket items. Asia’s largest corporation is tackling also the rise of rivals such as ByteDance Ltd. and Pinduoduo Inc. And the Tmall operator is going head-to-head with Tencent Holdings Ltd. for internet leadership in everything from online media to payments and cloud computing.Alibaba has lost more than $40 billion of market value since the coronavirus first erupted in January, and now has to grapple with not just an uncertain global economic environment but also any potential fallout from U.S.-Chinese financial tensions. On Friday, executives sought to assuage concerns about a U.S. bill that mandates much closer accounting scrutiny of U.S.-listed Chinese companies and may bar them from American bourses.Chief Financial Officer Maggie Wu said Alibaba’s financial statements have been consistently prepared in accordance with U.S. GAAP accounting measures and were beyond reproach. “The integrity of Alibaba’s financial statements speak for itself, we have been an SEC filer since 2014 and hold ourselves to the highest standard,” she told analysts on a conference call. “We will endeavor to comply with any legislation whose aim is to protect and bring transparency to investors who buy securities on U.S. stock exchanges.”The bigger short-term challenge is in reviving growth: Alibaba’s bread-and-butter customer management or marketing business grew just 3% in the March quarter. Much of that stems from weaker consumer sentiment during the coronavirus-stricken quarter, when total Chinese e-commerce rose just 5.9% or at less than a third of 2019’s pace, according to government data.Rival PDD posted a revenue rise of 44% on Friday, down sharply from 91% in the previous quarter, although that still beat expectations. Its sales and marketing expenses jumped 49%.Alibaba’s net income was 3.2 billion yuan, down 88% from a year ago when it booked an 18.7 billion yuan one-time gain on investments. In February, Alibaba declared a waiver of some service fees for merchants struggling financially during the outbreak on its main direct-to-consumer Tmall platform. In April, the company rolled out a new 10-billion-yuan subsidy program for Tmall users to buy electronics, encroaching on JD.com Inc.’s traditional turf. These initiatives may further compress margins for the June quarter.“The challenging part is for them to achieve the same amount of growth this year,” said Steven Zhu, a Shanghai-based analyst with Pacific Epoch. “Just because they are too big, for the same amount of growth, they need to spend much more effort.”But executives were confident in a gradual e-commerce recovery over the year. Beyond its main business, younger divisions such as its cloud computing arm should buoy its bottom line. That division’s revenue jumped 58% in the quarter.“Despite a challenging quarter due to reduced economic activities in light of the COVID-19 pandemic in China, we achieved our annual revenue guidance,” Wu said in a statement. “Although the pandemic negatively impacted most of our domestic core commerce businesses starting in late January, we have seen a steady recovery since March.”What Bloomberg Intelligence SaysThe company’s businesses most impacted by merchant and logistic disruptions are also its most lucrative, such as retail marketplaces Taobao and Tmall, while faster-growing segments like cloud computing and digital entertainment don’t contribute to profit. Subsidies for users and merchants will add to costs. Alibaba may provide an improved growth outlook for the June quarter given the retreat of the pandemic in China, but the recovery could be gradual as consumption sentiment remains weak.\- Vey-Sern Ling and Tiffany Tam, analystsClick here for the research.For 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’s Lost Magic Is a Warning for the Future

    (Bloomberg Opinion) -- Although it’s not surprising that China’s Alibaba Group Holding Ltd. has joined a long list of global consumer companies that took a hit from the Covid-19 pandemic, the details of its March-quarter earnings indicate that its struggles may not be over after the crisis subsides.Consider online commerce, which investors might expect to benefit from customers being stuck at home. In fact, commissions dropped while ad revenue climbed, with a net result of just 2% growth in a sector that counts for around half of annual sales. Counterintuitively, the consumer segment that did manage solid growth was its physical retail businesses such as groceries. Then there’s those hot new areas that should enjoy strong demand from the stay-at-home economy. Cloud computing is the obvious beneficiary. Companies, consumers and educators have been rushing to online solutions to fill in for in-person events. At Alibaba, that business climbed 58% from a year earlier. That sounds like a huge number but is in fact the slowest level in at least two years. Rather than drive growth, the pandemic seems to have hindered it. This matters because Alibaba is doubling down on cloud computing in recognition of that sector’s future prospects and is absorbing continued losses. If it’s unable to leverage such an opportunity, then other challenges including competition and regulation pose potential headwinds.Another supposed opportunity comes from digital media and entertainment, which includes streaming service Youku, Alibaba Music and TMall TV. Collectively, this category climbed a mere 5% for the quarter and only 12% for the year and remains the single biggest drag on earnings. If growth is stalling, even as consumers are stuck at home and well before break-even, then investors have to wonder how long Alibaba is going to let this business burn a hole in the earnings statement.It’s easy to dismiss all these items as one-offs, ready to be overcome once sunny skies return. Yet the macro picture for Alibaba is not rosy. Growth is slowing everywhere. Active annual consumer numbers climbed a mere 2.1%, and China’s government earlier Friday scrapped its annual GDP target, an admission that the broader economy is going to suffer.Although investors want to believe that China’s rapid return to work will be like a wave of the wand for its tech titans, Alibaba is no magician.This column does not necessarily reflect the opinion of the editorial board or 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.

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