Breakingviews

Alibaba offers two insights into China economy

January 28, 2016

The e-commerce giant’s third-quarter revenue rose 32 pct, above expectations. It shows China shifting to more consumption. But it also shows that Alibaba, like China, needs new ways to grow. Forays into local services and the cloud make it a less useful proxy for the consumer.

Yahoo CEO has run out of time for a turnaround

December 2, 2015

After three years, it’s clear neither Marissa Mayer – nor maybe any top executive – can save the flailing internet company. The board’s job now should be to determine the best way to tidy up the firm’s affairs. Mayer’s best legacy may be that she got a good price for the core business.

Starboard’s Yahoo flip-flop misses the point

November 19, 2015

The pushy investor now wants the $31 bln tech company to offload its main business instead of its Alibaba holding. A switcheroo won’t erase a discount and residual tax liability on the stake. However it’s engineered, the real problems for Yahoo boss Marissa Mayer will remain.

Alibaba bid turns Youku from horror to mystery

October 16, 2015

The Chinese e-commerce group is offering $5.2 billion to buy the video site in which it owns a stake, at a 30 percent premium. Being absorbed into Alibaba ought to improve returns for the perpetually loss-making Youku. It should create value – not that either side is asking.

Yahoo’s Alibaba spinoff troubles may outlast boss

September 29, 2015

Marissa Mayer plans to complete the internet firm’s separation from the Chinese e-commerce company. Resolving tax issues may take years, though, if authorities challenge the deal. With Yahoo’s business stagnant and competition rising, the CEO may be gone before wrangling ends.

Alibaba’s golden-child status hangs by a thread

August 12, 2015

The Chinese e-commerce group’s disappointing quarterly revenue growth pushed the shares close to last year’s float price. Investors haven’t much challenged founder Jack Ma’s free rein so far. A weakening business and over $100 bln of lost market capitalisation may change that.

Alibaba deal spree strains its financial strength

March 24, 2015

The e-commerce giant barely explained its recent investments in an Israeli venture capital fund or U.S. chat app Snapchat. Similar purchases absorbed 75 pct of Alibaba’s operating cash flow in 2014. Though its core business is robust, returns on the new ventures are uncertain.

Yahoo’s Alibaba spinoff attracts big discount

February 12, 2015

The company’s plan to distribute its stake in the Chinese company hasn’t excited investors. A Breakingviews calculator suggests they are attaching a 34 pct discount to the U.S. tech firm’s Alibaba shares – assuming Yahoo’s core business is worth something. That’s too cautious.

Say “ni hao” to Jack Ma’s Amazon-style volatility

January 29, 2015

Alibaba’s boss, like the U.S. group’s Jeff Bezos, has built online retail dominance. But there are downsides. Unpredictable earnings are Exhibit A. The Chinese group also has fickle regulators. It may not be the last time investors suffer nearly $40 bln of losses in two days.

Alibaba delivers chunky growth, but at a cost

November 4, 2014

The Chinese e-commerce giant pulled off a 54 pct revenue increase for the second quarter, its first results since listing in New York. But earnings slipped, only in part because of big IPO payouts to staff. Alibaba also says it targets sales, not margins. That’s not reassuring.