"After being listed in the U.S., we will develop our business in Europe and in the U.S.," Ma told a packed group of journalists ahead of his presentation to investors. "We will not give up the Asia market because, as I would say, we are not a company from China, we are an Internet company that happened to be in China."The investor luncheon took place in a huge venue at the luxury Ritz Carlton hotel. The hotel shares the same building as three of the main bookrunners of the IPO, just an elevator ride away from Credit Suisse, Deutsche Bank and Morgan Stanley offices, across the harbor from the city's financial center. Fund managers and analysts were given orange bracelets to give them access to the banquet of smoked salmon, chicken breast and mango pudding. The event had two videos and a question and answer session with Ma answering most of the questions, according to investors at the presentation. MISSED OPPORTUNITY Alibaba picked New York for its debut after Hong Kong officials rejected its request to allow a small group of company insiders to nominate the majority of its board. The request went against Hong Kong's "one share, one vote" principle, which has been staunchly defended by its securities regulator.
Ma, who is also Alibaba's executive chairman, said that the missed opportunity came about in part because of how Alibaba communicated its plans to local authorities, mirroring statements he gave last year. "People say that Hong Kong lost the Alibaba deal. To me, I think it is Alibaba that missed this great opportunity to list in Hong Kong," Ma added. "We love Hong Kong. We will continue to love Hong Kong and invest in Hong Kong." The company is expected to price the deal on Sept. 18. It will start trading a day later(Reporting by Elzio Barreto and Fiona Lau of IFR; Additional reporting by Supriya Kurane in Bangalore; Editing by Matt Driskill, Bernard Orr) ===
Yahoo's Mayer nears post-Alibaba reckoning
Richard BealesYahoo on July 15 reported second-quarter revenue of $1.1 billion, down 4 percent from a year earlier. As-reported earnings per diluted share at the U.S. internet group declined 15 percent to $0.26 a share in the quarter.
The company said it had agreed with Chinese e-commerce operator Alibaba to reduce the maximum number of shares that Yahoo is required to sell in connection with Alibaba’s initial public offering from 208 million shares to 140 million shares. Yahoo currently owns 524 million shares of Alibaba stock, a 22.5 percent stake.
Alibaba on July 11 filed a revised draft prospectus for its IPO with the U.S. Securities and Exchange Commission. Share-based awards granted in the first 10 days of July were valued at $56 per restricted stock unit. With 2,328 million ordinary shares outstanding as of March 31, the implied market capitalization of Alibaba is $130.3 billion.
Yahoo is a big company with a much smaller one struggling to get out. A 22.5 percent stake in Alibaba accounts for well over half the U.S. internet group’s roughly $36 billion market capitalization, according to a new Breakingviews calculator. With the Chinese e-commerce giant likely to go public next month, Yahoo Chief Executive Marissa Mayer will find out how investors value the businesses she actually runs.
calculatorAlibaba is worth around $130 billion before any new money is raised, based on its latest published internal valuation. Assuming Yahoo eventually pays tax at 30 percent on its gain above the small original cost, the post-tax value of its stake is more than $20 billion. Yahoo’s other Asian holding, a 35.5 percent interest in Yahoo Japan, is worth a bit more than $6 billion after tax.
Within Yahoo’s enterprise value, after deducting net cash, of around $33 billion, that leaves the company’s own businesses worth a little over $6 billion. And two years into Mayer’s tenure, total revenue is still shrinking, second-quarter financials showed earlier this month.
Yahoo recently negotiated downward the maximum number of Alibaba shares it has to sell in the initial public offering. But offloading just over a quarter of its holding will still bring in more than $5 billion after tax, more than doubling Yahoo’s stash of cash and marketable securities.
Mayer has managed to get search-related revenue growing again, by 2 percent year-on-year in the second quarter using the standard accounting definition. She needs to maintain that, despite being locked into a stagnant partnership with software giant Microsoft, while also rescuing display ads, where the top line declined 8 percent. Acquisitions offer some hope of growth. For instance, buying internet upstart Tumblr for $1.1 billion last year injected social media credibility, though not obviously much revenue.
Mayer has sensibly promised to return at least half the post-tax Alibaba proceeds to shareholders. While rivals like Facebook splash cash on big, risky acquisitions, the Yahoo shambles Mayer inherited and has not yet fully fixed calls for some skepticism. Once Alibaba has its own U.S. listing and investors don’t need to buy Yahoo as a proxy, the value attributed to the search and display businesses will be easier to quantify. That will put Mayer under a narrower, brighter spotlight.
====================================================== Alibaba to let employees buy shares in IPO: WSJ Fri, Sep 05 12:06 PM EDT image (Reuters) - Chinese e-commerce company Alibaba Group Holding Ltd (IPO-BABA.N) will allow employees and people close to the company to buy shares in its forthcoming initial public offering, the Wall Street Journal reported, citing people familiar with the matter. The program, informally known as a "friends and family" plan, allows employees and people buy shares at the IPO price before it starts trading publicly. Normally, the IPO price is available only to professional investors and a few individual investors. Such programs were a popular practice by U.S. companies during the 1999-2000 dot.com boom as a way to reward employees but has declined since then, the newspaper said. (http://on.wsj.com/1u6O1jz) Alibaba is nearing the launch of its hotly anticipated offering, which could raise more than $20 billion, making it the biggest technology listing in the United States. (Reporting by Tanya Agrawal in Bangalore; Editing by Maju Samuel) ========================== Alibaba talks corporate governance to potential IPO investors Mon, Sep 08 19:11 PM EDT image 1 of 2 By Liana B. Baker and Jessica Toonkel (Reuters) - Alibaba Group Holding Ltd (IPO-BABA.N) founder Jack Ma on Monday surprised potential investors at a standing-room only event in New York by addressing governance concerns over the Chinese e-commerce giant, including a controversial 2010 spin-off of its online payment service. Ma made the remarks at a luncheon at the Waldorf Astoria hotel in New York in front of hundreds of hedge funds, mutual funds and other institutional investors, as the company kicked off a two-week, multi-city marketing blitz for its initial public offering. Alibaba was expecting about 500 investors to attend the first stop on the roadshow, but some 800 showed up, forcing some into overflow rooms. Alibaba is seeking to raise more than $21 billion in the largest-ever U.S. technology IPO, valuing the company at up to $163 billion. It expects to price the IPO at $60 to $66 per American Depositary Share, which are scheduled to start trading on the New York Stock Exchange later this month. Industry analysts had expected Alibaba to try for a valuation in excess of $200 billion, ranking it among the 20 largest publicly traded companies in the United States. The marketing effort, which will take Alibaba on a globe-trotting tour, will help determine whether the company will price above its initial range and come closer to that valuation. Several investors who spoke with Reuters before and after the event said they went into the presentation with a series of questions about Alibaba, ranging from concerns about its corporate governance and transparency, to plans for U.S. acquisitions and growth. They said they did not learn anything new during the lunch - of boxed turkey sandwiches - but came away feeling the event was well-choreographed. Akram Yosri, a managing partner at 3iCapital Group, said he had hoped to find out more about how the company planned to grow globally, and particularly how it plans to compete with Amazon.com Inc (AMZN.O) and eBay Inc (EBAY.O) in the United States. "Did I learn anything? Absolutely not," he said. But Yosri and other investors said they found Ma to be impressive, with some describing the former English teacher who founded the company in his apartment as "charismatic". In his 10-minute remarks, Ma emphasized how the company serves small businesses in China and addressed issues of governance, investors said. Alibaba accounts for about 80 percent of all online retail sales in China, where rising Internet usage and an expanding middle class helped the company generate gross merchandise volume of $296 billion in the 12 months ended June 30. Revenue in the June quarter increased 46 percent to $2.54 billion from a year earlier, faster than the 38.7 percent growth in the previous quarter. But the company has seen its share of controversy, in particular over governance and the outsized influence of its founder and senior managers. Ma holds deep sway over executive and board appointments at the company, an influence that is set to strengthen further after it goes public. In 2010, a decision to spin off Alipay to a company Ma controlled also led to objections from major investors, including Yahoo Inc (YHOO.O) and SoftBank Corp (9984.T). Ma surprised investors at the event by talking about the move unprompted. "Ma said it was a tough decision and time will prove it was a good one," one investor at the luncheon said, referring to the Alipay decision. Two other investors who had flown from Toronto to attend the roadshow said they understood Ma’s comments to mean, "'Trust me on this one.'" An Alibaba spokesman declined comment. Alibaba has been billed as one of the hottest IPOs of the year, eliciting the kind of anticipation among investors that was last seen in 2012 when Facebook Inc (FB.O) went public in a $16 billion offering. Alibaba's draw was evident on Monday. Investors waited on long lines for elevators, making some fret about being able to make it to the venue on time and other hotel guests wondering about the cause of the commotion. Among the investors attending the event was Mario Gabelli, CEO of Gabelli Asset Management. The event, which started later than expected, kicked off with a video about the company. Executive Vice Chairman Joe Tsai presented some slides; Ma's remarks followed. Management took questions from investors. But 3i's Yosri said all questions were screened. He said he was disappointed they didn't take "the tough New York questions." EARLY START Alibaba executives and bankers started their day early, with a management presentation to about 300 salespeople for the six banks underwriting its offering. They gathered at Citigroup Inc's (C.N) offices on Greenwich street in Lower Manhattan for an hour, according to the source familiar with the meeting. Besides Citigroup, Credit Suisse Group AG (CSGN.VX), Deutsche Bank AG (DBKGn.DE), Goldman Sachs Group Inc (GS.N), JPMorgan Chase & Co (JPM.N) and Morgan Stanley (MS.N) are the joint bookrunners for Alibaba's IPO. Rothschild is Alibaba's independent equity adviser. Tsai fielded questions and did the main presenting to the sales force at the Citigroup meeting, according to the source. Alibaba is selling 123.1 million of the 320.1 million ADS shares slated for the IPO. Shareholders including Ma, Tsai and Yahoo are offering the remainder. The company plans a Tuesday presentation at the Four Seasons hotel in Boston, according to a person who saw an invitation. (Reporting by Liana B. Baker and Jessica Toonkel in New York; Additional reporting by Michael Erman; Editing by Lisa Von Ahn and Bernard Orr) ==================================
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