China’s start-up market can win against the odds
– Wei Gu is a Reuters columnist. The opinions expressed are her own —
It is hard to be very optimistic about China’s proposed stock market for start-up companies. After all, similar attempts in other countries have a decidedly mixed track record. Why would China, where small private companies face an uphill battle against state-owned firms, be any exception?
Nevertheless, there are reasons to believe that the start-up market, set to debut in October, offers better potential than previous efforts in Singapore, Germany and Hong Kong.
The country has a big reservoir of fast-growing small companies with real profits. In the past, they have opted for listing on foreign exchanges such as the Nasdaq. Though they were attracted by the prestige of a foreign listing, they also faced a home market that favors size over quality.
Indeed, China, home of internet stars such as Baidu and Sina, is the second-largest foreign supplier of companies to the Nasdaq.
But the exodus has almost ground to a halt. Beijing has tightened its grip on foreign listings because it wants to keep the best growth companies at home. Only companies which already have overseas structures can list their shares abroad, but even then they have to jump through a lot of regulatory hoops.
Obtaining a domestic listing will become much easier, as Beijing has ambitious plans to float hundreds of companies on the new market each year. Maintenance fees are lower and disclosure requirements are less stringent when listing at home.
Can sleeping giant Skype reinvent itself?
– Eric Auchard is a Reuters columnist. The opinions expressed are his own –
Do once-hot Internet start-ups who miss a date with destiny ever truly get a second chance? History says no, even for once-great names like Netscape, AOL and MySpace.
Skype hopes to be the exception. On Tuesday, a group led by top Internet financiers in Silicon Valley and Europe agreed to pay eBay $1.9 billion in cash for a 65 percent stake in the one-time web calling sensation.
The deal values Skype at a face-saving $2.75 billion, well above the $1.7 billion at which it has been valued on the ecommerce giant’s books. Ebay also stands to keep a 35 per cent stake in the company.
But that overlooks the humiliating $1.4 billion eBay has written off on the original deal. Four years ago, eBay promised to pay up to $4.3 billion for Skype, but it later scaled back the total payout. All told, it makes Skype one of the biggest value destroyers of any Internet merger since the last days of the dot.com era.
EBay’s justification for the Skype deal in 2005 was how its chat and calling services could serve as an online customer service platform connecting consumers directly into eBay merchants. That never happened.
Instead, product innovation slowed and business setbacks, such as a corporate ban on Skype’s network-hogging software inside companies, were allowed to fester, rather than becoming new business opportunities.
WHAT “AXE” DOES THIS GUY HAVE TO GRIND WITH SKYPE…DON’T KNOCK PHENOMENAL SUCCESS..SKYPE’s A BEAUTIFUL THING!!!!
WHATS MORE IS THE PHONE COMPANIES HAVE HAD YEARS OF
“RIP OFF” RATES…SKYPE SIMPLY VERIFIED THEIR EXCESSES!!
India has no good experience of a stock exchange named ‘OTC’ for smaller companies. China has controlled economy, so may be successful in their efforts.