How Big Will Alibaba Group Become?
Meet Alibaba Group. It's soon to become bigger than either Tencent or Baidu. The biggest Chinese Internet company in the world.
Read the full post in Forbes
Showing posts with label Jack Ma. Show all posts
Showing posts with label Jack Ma. Show all posts
Thursday, May 24, 2012
Wednesday, April 18, 2012
Ho Hum Earnings from Yahoo! But Lots of Reason for Excitement
I think the honeymoon with Yahoo! (YHOO) CEO Scott Thompson is over after last night’s performance on the earnings call. It’s been a good 90 day run, but it’s over now. Back to work, Scott. Time to stop talking and start delivering.
Read the full Post on Forbes
Monday, March 05, 2012
If Facebook's Worth $100 Billion, Alibaba Group is Worth $57 Billion
Yahoo!'s stake in Alibaba Group alone is worth at least $23 billion judging by its growth compared to Facebook's. Yet, Yahoo!'s total market cap is below $18 billion.
Read the full post in Forbes
Thursday, December 22, 2011
Next Yahoo! Question: What's the Core Worth?
Wednesday's news that Yahoo!'s (YHOO_) board is considering two separate "cash-rich splits" of their stakes in Alibaba Group and Yahoo! Japan is great news for Yahoo! longs.
Read the full post in TheStreet
Wednesday, November 09, 2011
How a "Cash-Rich Split" Could Take Yahoo! to $41/Share
The best option for Yahoo! shareholders is the company disposing of its Asian assets in a structure called a "cash-rich split." Here's how it could work and turn Yahoo! into a $41/share stock.
Read the Forbes post
Thursday, October 13, 2011
Thoughts on Yahoo! Buyers and Why Mike Lazaridis Needs to Be Put In a Room
My appearance on Bloomberg West last night
See the video here
Tuesday, October 11, 2011
Someone Should Just Go Ahead and Buy Yahoo!
What Jerry Yang's interest in Yahoo! really means.
Read the full post in TheStreet
Wednesday, September 28, 2011
Alibaba Group will IPO as a Whole - Not as Parts
When it IPOs, expect one Alibaba Group IPO - not several parts IPOs.
Read the full Forbes post
Tuesday, September 20, 2011
Does This Former Alibaba Insider Think Alibaba Group Is Worth $50 Billion?
A slip of the tongue from an Alibaba insider a year ago suggested Yahoo's stake alone in the private company is worth $20 billion.
Read the full Forbes post
MarketWatch: An idea to appease Yahoo investors
From today's Therese Poletti's MarketWatch column:
By Therese Poletti, MarketWatch
SAN FRANCISCO (MarketWatch) — Investor Eric Jackson has some ideas for Yahoo Inc. that could appease its battle-scarred investors and solve the problem of what to do with the company’s highly valued Asian assets.
Some readers might remember that Jackson has been an outspoken investor when it comes to Yahoo YHOO -0.10% . In 2006, he wrote an open letter calling on Terry Semel to step down as chief executive. He also was one of the more vocal activists who criticized the board during Carl Icahn’s proxy fight with Yahoo in 2008.
This time around, Jackson has been relatively quiet, mostly opining in columns on Forbes and on Twitter.
First and foremost, he said he would prefer that Yahoo simply spin out its Yahoo Japan assets to shareholders, either though a sale to Softbank Corp. or some sort of other spinout.
But if that doesn’t happen, his next best idea is for Yahoo to create three separate tracking stocks. It’s a tactic that has been used by other media companies in the past — including Liberty Media Corp., which embarked on the idea in 2006 and has since resulted in three tracking stocks.
“They wouldn’t have to seek Softbank’s approval or Alibaba’s approval, which otherwise might be a sticking point,” said Jackson, referring to Yahoo’s 40% stake in the privately held Alibaba, the largest e-commerce company in China. In addition, Softbank JP:9984 -1.63% of Japan owns about 29% of Alibaba.
“They would have to present it to shareholders, but that’s probably a foregone conclusion because anything that is going to create more value than the current status quo” would get approved, he added.
Jackson, whose firm Ironfire Capital currently owns a stake in the Internet pioneer worth about $25 million, said he has pitched the idea to Yahoo, but doesn’t believe the company is receptive to this notion. Jackson’s proposal would include a tracking stock for the core Yahoo business, another for Yahoo Japan and another stock to represent its 40% stake in Alibaba.
“I have presented these ideas to them,” he remarked. “I sense a weariness from them. They say, ‘We have already thought of that. Our experts have problems with that.’ I think that goes back to the tone at the top, the tone coming from the board.”
Investors appear to be fed up with Yahoo’s board, which fired former Chief Executive Carol Bartz two weeks ago. Hedge-fund investor Daniel Loeb, whose firm Third Point has a 5.2% stake in Yahoo, said he will wage a proxy fight and propose a slate of new directors at the annual meeting next year if he’s unable to make any headway with the board.
“From the failed Microsoft MSFT +0.04% sale negotiations; to a subsequent bungled and disappointing search deal with Microsoft; through a series of misguided CEO selections; and most recently the Alipay debacle, this board’s failures have destroyed value for all Yahoo stakeholders,” Loeb wrote in his letter to the company’s board two weeks ago.
As Loeb notes, one of the many sore points for investors is the company’s hefty stake in the privately held Alibaba, which has at least one pre-IPO property, Taobao.
Jackson’s theory is that a tracking stock could mirror the value of the Asian assets, which cannot be easily spun off. The shareholders, though, don’t have any ownership of the assets they are tracking.
“To me and to a lot of Yahoo investors, looking at the Yahoo Japan piece, there is a value to be extracted there,” according to Jackson. “But it’s time to harvest that asset.”
Short of that, the tracking stocks would be a way to share some of the underlying value with investors. With a lot of the M&A talk going on regarding Yahoo, with private-equity firms reportedly looking at the company, Jackson said it would be a mistake to sell off the entire Alibaba stake. “It’s going to go through some huge growth,” he commented. Read more about potential bidders taking a look at Yahoo.
Tracking stocks certainly can be problematic in and of themselves, because there still remains one legal corporate entity, one CEO and conflicts among the different shareholder groups as to the allocation of resources in a company.
But since Yahoo’s core operations have nothing to do with Alibaba, a tracking stock for those assets might work as a way to assign the real value to the assets that many investors believe are propping up Yahoo’s shares.
Another potential problem with this idea is that Alibaba is private, and its financials are mostly undisclosed. Investors would need this sort of data to evaluate such a tracking stock. Yahoo would have to disclose Alibaba’s financials to U.S. regulators as well as investors.
“Yahoo could do this and Alibaba Group wouldn’t be able to stop them,” Jackson said. “It is completely within Yahoo’s current set of rights. However, Alibaba doesn’t want to release their full financials, because this lowers their bargaining power in trying to buy back part of their 40% stake that Yahoo controls before Alibaba Group decides to IPO.”
Even Jackson agrees that with all the deal chatter, this scenario is not likely to happen, unless one of the companies looking at Yahoo is Liberty Media itself. With Greg Maffei, former chief financial officer of both Microsoft and Oracle as Liberty’s current chief executive, it’s not completely out of the realm of possibility.
Therese Poletti is a senior columnist for MarketWatch in San Francisco.
Sphere: Related Content
Thursday, September 15, 2011
The Most Likely Buyers for Yahoo!
Which folks are likeliest to buy Yahoo! and at what premium?
Read the full Forbes Post.
Friday, July 15, 2011
Why Did ISS Recently Advise Yahoo! Shareholders to Re-Elect the Board?
Yahoo!'s board has been one of the worst in Corporate America for 10 years. Why did influential proxy advisory firm ISS recently give them a "Thumbs Up"?
Read the full Forbes article here.
Friday, July 08, 2011
What Did Yahoo! Not Want You To Read This Morning?
There is much bigger news about Yahoo today than David Einhorn selling his stake.
A couple of days ago on his blog, Bill Bishop posted some details about an upcoming interview between Jack Ma and China Entrepreneur Magazine.
The interview is the newest example of Ma going out of his way in the Chinese media to defend his actions in transferring Alipay out of Alibaba Group without Yahoo!’s (YHOO) or Softbank’s consent. He previously had spoken out at length to Caixin Magazine and done an extensive press conference at the company’s headquarters in Hangzhou.
This newest interview was the most outspoken yet for Ma. Beyond Bill’s highlights in his post was a SlideShare document with the full Chinese and English translation transcript — 23 pages in all. Some of the most striking language was in that document.
This morning, I noticed the post had been updated. Here was his comment at the bottom of the new post:
UPDATE: I removed the full text of the Jack Ma interview and English translation at the request of China Entrepreneur Magazine. They did not want the full text online anywhere but their own site, and apparently Yahoo and Alibaba were upset at the translation and the portrayal of some of the parties involved. The real issue was probably not the translation but what Jack Ma said. As best as I can glean the Alipay compensation negotiations are not close to completion. Alibaba is doing its own translation, to “clean up” what Jack Ma said. If there are discrepancies that appear to change what was said I will update again.
So, reading between the lines of Bill’s comments, I have to believe it’s more from Yahoo!’s side that they objected to the content of the English translated 23 pages, rather than Alibaba, since Jack Ma is the guy who gave the full interview in the first place.
I read the full post a couple of days ago, included the translation that has now been removed and luckily made a few notes. Here’s a summary of the text that was there and which is no longer there now:
- In June 2009, Alibaba Group’s board transferred 70% of Alipay from the Group to a Caymans-based entity controlled mostly by Ma. This Caymans entity had a Variable Interest Entity (VIE) relationship with the Group, meaning that Yahoo! and Softbank still indirectly owned Alipay
- On June 21, 2010, the People’s Bank of China (PBoC) released rules for Chinese companies in the payment services business
- On August 6, 2010, the final 30% stake of Alipay was transferred over to the Caymans VIE
- According to Ma, the Group board approved both transfers
- On January 26, 2011, the PBoC faxed Alibaba Group asking them to declare if they had a VIE connected to Alipay. Ma states that it was understood that if the Group had a VIE, it would not receive a government license because they do not want any foreigners controlling something strategic like a payments company
- Ma says he had 3 choices: (1) keep the VIE and hope the government changed its mind but risk having them shut down Alipay, (2) maintain the VIE but lie, or (3) terminate the VIE to comply with the government. He chose the latter but claims Softbank’s Son wanted him to do #2 and lie.
- Yang couldn’t make a decision because all of the options would make him look bad to his shareholders. So he abstained from the decision.
- Ma on Son: “he’s the best negotiator in the world and the world’s biggest cheapskate.”
- Ma on Son: “If Ali Group had listened to more than 30% of Sun’s advice on business and operation, this company would have died a long time ago. A lot of his advice was stupid.”
- Several people approached Ma last year about buying a stake in Yahoo but Ma declined due to “kindness”. The magazine speculated that he might not want to own a stake in a company controlled by Son.
- Ma says he did have “special private communication” with the PBoC prior to the rules coming out.
- On the Alibaba Group board: since setting up the board in 2005 “not one decision has been approved by the board. A lot of things have been discussed outside of the board and the board have come to an agreement.”
- On whether there could have been a better solution if there had been more time: “this matter wouldn’t have even been approved with ten times the time. Why? It has to do with the ass-brains of these two. [NB See the update at the bottom of this post for some clarification on what an "ass-brain" is in the original Chinese.] Sun wants to benefit Softbank and Yahoo wants to benefit Yahoo, and they doesn’t care who’s going to take responsibility for this company.”
- On making his unilateral decision: “I admit that this decision isn’t the most perfect one, but it’s the only answer. I’m not saying I’m correct, I’m just saying I think i’ve done what I believe to be right.”
- On whether he should have lied to the government as Son wanted: “I’m almost 50, am I supposed to go and do something illegal?”
- When asked if Yahoo was lying about not knowing about the transfer of shares: “What do you think? Every time we have a board meeting there are minutes taken. Them saying that is so they can say to their shareholders: ‘This is Ma’s responsibility, don’t blame me.’ In reality, it’s giving me more pressure and bargaining chips in negotiations.”
- On Yahoo’s delay between March 31 and mid-May when they revealed the share transfer in their 10Q: “When Yang received the forms, he should have immediately told the Yahoo shareholders, but he waited until May to tell them. So now, Yahoo’s US shareholders blame Yahoo, not us.”
- “Before, this fireball was in my hands, and they said nothing. I was falling all over the place, not knowing what to do, and now i’ve given it to them.”
- On the state of the relationship today between Ma, Son, and Yang: “We’re not really that split. We argue it out in the day then go for a drink in the evening.”
- On why Son is now quiet: “He never shows his cards, his negotiation tactic is never to show his cards, and to force you. He’ll force you into a corner without showing his cards. He still hasn’t shown his cards, he’s waiting for Yahoo to do it, because Yahoo’s bargaining position is worse than his. Sun’s thinking a lot harder than Yahoo, he’s a lot more crafty.”
- On what the compensation to Yahoo and Softbank for Alipay will be: “The compensation will be large, very large.”
Some other interesting points from the article:
- Although Yahoo invested $1 billion for its 40% stake in the Group in 2005, Softbank invested only $80 million (in 2 rounds) for its 30% stake
- Ma was surprised at the criticisms that have come his way from the “domestic press” in China
- Ma was reelected to the Softbank board on June 25th
- Ma claims the US government has been involved in this dispute since it started but then says he can’t say any more.
- Qihoo 360′s (QIHU) CEO, who used to be the CEO of Yahoo China, said “the shares Yahoo has in Alibaba are perhaps worth more than all of its own shares.”
What remains unanswered is why the Chinese government insisted that a VIE not be connected to a payments service. We still don’t know.
It seems that Ma does want to reform how he’s been portrayed within China. That’s the reason for all these interviews.
When will there be a deal and how much will it be for? We don’t know. It doesn’t sound imminent from this conversation. However, the fact that Ma is spending so much time defending his actions makes me hopeful that a resolution will be found.
I hope that Yahoo’s board reads what Ma has said and tries to be a little bit more “crafty” themselves for a change.
[At the time of publication, Jackson was long YHOO]
Read the full post here at Forbes.
[UPDATE: Some have complained they can't see this original post on Forbes, so it's now here. Also, I received an email from Iris Guan, the English Editor of China Entrepreneur, saying that I was welcome to report on the article. They simply made a few updates to the translation that originally appeared on Bill's blog. For example, when Ma refers to Yang and Son as "ass brains" that is a literal translation from a Chinese idiom. According to Guan, it actually refers to "seeing things from your position."]
Wednesday, July 06, 2011
My First-Hand Impressions of the Chinese Tech Sector
Here are my top 11 impressions of the Chinese tech sector from my recent trip there.
Read the full post here at Forbes.
Tuesday, July 05, 2011
How is Jack Ma Viewed Within China for What He Did to Yahoo!?
Many inside China, as well as outside, fear Jack Ma because of his and his company's market power.
Read the full post here on Forbes.
Thursday, June 30, 2011
The Footsteps of Giant
By Eric Jackson Eric: What do you think of the recent Chinese frauds and your CEO speaking out in favor of Jack Ma (Shi tweeted on Sina (SINA - commentary -Trade Now) Weibo that Ma was a "patriotic hooligan" a few days after the Alipay newsbroke)? GA: Definitely there has been some backlash against Chinese companies in recent weeks. Our CEO got involved with Jack Ma because he and Ma have been friends for a long time. He wanted to express his opinion and was surprised at the reaction it got from some Yahoo! (YHOO - commentary -Trade Now) investors and supporters. However, this issue doesn't affect our business. Eric: Your shares went to a high of $9.45 a share recently, but they've come down since. Do you think the CEO and the recent frauds have anything to do with the pullback? GA: Wall Street people now think many Chinese companies are overvalued and therefore some of the newer IPOs have been having a hard time. But our businesses are still good. The original ZT game is still very profitable. We launched ZT2 last November, it spread through word of mouth, and the number of users has grown healthily without much use of marketing. In the first quarter, ZT2 didn't contribute much to our revenue, but it will contribute more revenue this quarter, and we hope the trend will sustain at least for the next 8 quarters.
RealMoney Contributor
6/30/2011 11:30 AM EDT
Click here for more stories by Eric Jackson
I recently visited Giant Interactive's (GA - commentary - Trade Now) offices in Shanghai. The massively multiplayer online (MMO) game maker has been around from almost 10 years. It was started by colorful Chinese tycoon Yuzhu Shi.
It rode to great success with its original ZT game. It recently launched ZT2 and the company is cautiously optimistic about its prospects for the next several quarters. Below is a lightly-edited recap of some questions I put to the company:
Thursday, June 23, 2011
Bloomberg: Jackson Says Ma, Son Should Replace Yahoo CEO Bartz
My appearance on Bloomberg West earlier this evening....
CNBC: Yahoo: Searching for New Leadership
Here is my CNBC appearance on Squawk Box from earlier today about the Yahoo! shareholder meeting happening later today:
[Rest in Peace: Mark Haines]
Wednesday, June 22, 2011
Why Either of these Two Asians Should Be Yahoo!'s Next CEO
Yahoo! doesn't need another boring and ineffective American to lead it. Let's let an Asian take the wheel - and finally unlock some value for Yahoo! shareholders.
Read the full post here at Forbes.
Friday, June 17, 2011
What Will Jack Ma Do Next With Yahoo!?
Jack Ma's reputation has taken a bit of a hit in the US and China, since he yanked Alipay out of Alibaba Group and away from Yahoo! and Softbank. her's what's likely to happen next.
Please read the full post in Forbes.
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