Alibaba for $ 4.6 billion of mergers make sense? -Ali Baba, Ali listed-IT news
Alibaba for $ 4.6 billion of mergers make sense?

According to foreign media reports, Alibaba's IPO (initial public offering) of big-screen has been opened, the Alibaba Group's recent series of mergers and acquisitions in the industry also pay special attention to the effect. Allegedly, at the Waldorf-Astoria Hotel in New York) Astoria) at IPO conference held the industry to question Ali Baba of the issue.

So Ali Baba in the end is how to handle such mergers? This, of course, is Alibaba is behind one of the key problems for fund managers. As an e-commerce giant Alibaba's IPO will finance up to $ 21.1 billion of funds for the group. So far this year, Alibaba group has spent $ 4.6 billion for merger and acquisition companies in various industries, including film and television production company, taxi booking service, and even a professional football team.

Although Alibaba group is still seeking new ways to attract shoppers to use their platform, while also trying to create new channels to promote business growth, however, for a large number of business mergers and acquisitions would weaken Alibaba Group's profitability, leading to the Group's decline in interest rates, while Alibaba's cost but also to absorb, and supports the development of full table service. Meanwhile, some already control the Board of Directors of Alibaba group, insiders were tight-lipped on the Group's merger and acquisition transactions, rarely revealed message to investors.

Oberweis asset management company analyst jiefu·PAPU (Jeff Papp) said: "for me, the biggest problem is-they think beyond the e-commerce business with growth potential businesses exactly what kind of development in the future. Want to develop new mergers and acquisitions business, so hopeful of interest rate will be what kind of impact? ”

And investor of Alibaba group meeting will be held at the Waldorf-Astoria Hotel in New York today (Waldorf-Astoria). According to people familiar with the matter said news that Alibaba group has predicted that more than more than 500 participants. Alibaba executives will start, first to the United States in major cities Roadshow after visiting world, final stop in London and Hong Kong, China, these moves are in preparation for the final September 18 to determine stock prices.

Of course, held at the Waldorf-Astoria Hotel meeting, the investor's question is not limited to Alibaba's business merger and acquisition strategies. Fund managers say they will question more issues, which include: Alibaba group is planning to stop businesses on its platform and the sales of pirated goods payment service owned by Alibaba group and "Alipay" relationship.

IPO history

According to people familiar with the matter said news that by then, Maggie Wu, Vice Chairman Tsai, Alibaba Group's Chief Financial Officer and other key executives responsible for business deals will reply to the issues related to the industry.

IPO may create new history of Alibaba group, if calculated according to the upper limit of the current target price ranges for the subscription, the company may in the forthcoming IPO raised $ 24.3 billion, this amount will exceed the level of the world's highest record of agricultural Bank of China. According to hedge fund founder Eric Jackson of Ironfire Capital LLC (Eric Jackson) says that even Alibaba requires investors to make its highest valuation 162.7 billion dollars, but the valuation is likely to further increase, especially in those who have been seeking to rally investors to invest in Alibaba group situations. Jackson said: "it was the first time they discuss the price issue, the next, with the advance of road shows, they will take into account the investors ' concern about the situation of this important factor. ”

More shoppers

Alibaba group spokesman baobo·kelisidi (Bob Christie) are still declined to comment on the above comment.

Alibaba group has been competing with Asia's biggest Internet company Tencent, the two sides racing to expand coverage of the Internet business. So far this year, Tencent has carried out 15 deals, valued at approximately $ 3.7 billion, including a stake in Alibaba rival Jingdong Mall and 58 City website. Of course, judging from the data, this year's business acquisitions are still lags the Alibaba group.

Alibaba and Tencent are still searching for those mergers that will attract more users, especially users on the Smartphone platform. Alibaba said in June this year, the one-month mobile active users for 188 million, and by March this year to 163 million. In June of this year, the company agreed to buy remaining stake in UC browser, the user of an Internet browser and app stores for mobile devices and related services.

Alibaba group, in its prospectus, said: "our investment and acquisition strategies are designed to enhance our operational capability for three, namely, customer experience, enhance customer acquisition and management capacity levels and the ability to expand our products and services. ”

Investment Lyft

For now, the explosive growth of the Chinese Internet market could help Alibaba Group founder Jack Ma and Tsai, who proved the rationality of these mergers and acquisitions. Industry data shows that the number of Chinese Internet users had reached 632 million, well above except for India other than many of the country's total population, and is expected to rise to 850 million by 2015. Market research firm McKinsey & Co forecast that by the year 2015, China's online retail business will reach $ 395 billion, is about three times in 2011.

Alibaba last month disclosed that since UC browser benefits and stakes in companies such as OneTouch boost company second quarter of this year (in the three months ending June this year) net profit nearly three times.

Alibaba's investment team has been working on acquiring start-up companies in Silicon Valley. In March this year, Alibaba leading, joint investment company, the message TangoMe application service provider company has provided 280 million dollars of investment during the next month, Ali Baba and the car rental company invested Lyft.

Changjiang securities holdings (Hong Kong) Nelson, the company's Chief Investment Officer Yan said: "Alibaba Group acquired through business mergers and diversification to sustain high growth rates. People are very trusting of Ali Baba's ability, particularly in the areas of business management and diversified business after the acquisition. ”

Fewer restrictions

Ali Baba in a less restrictive way to handle business transactions, this approach will not change much after the listing, this is mainly beneficial influence of its corporate governance structure, which management structure could allow Alibaba's 27 partners nominate the Board's majority.

Pappu says: "this partnership framework will properly so that they do things that investors don't like. To a large extent, allows investors to purchase Humayun and goal programming and, therefore, some investors point of view, does not influence the company's decision. ”

Account vulnerabilities

Investors in listed companies may be of concern over the outcome of the decision. Alibaba acquired in June of this year, a TV production company said last month, they found Alibaba account vulnerability exists.

Fan Bohong, Professor, head of finance at the Chinese University of Hong Kong, "said Ma and his team will continue to do what they think is the right thing, they will not worry investors and the Board representatives with United States-style screening programmes. When investor confidence in China's gigantic growth market, this approach will work, but if problems occur when investors receive the protection will be very limited. ”