For the last five years, China-based companies listed in major US exchanges have been on the radar of momentum investors, sending the stocks of these companies soaring: Baidu Inc up 1000 percent; Sohu.com, Netease, and Sina up 300 percent. Lately, these stocks are off the investor radar, as these companies have come under the scrutiny of both, US and Chinese regulators; and new IPOs like Renren, E-Commerce China, and Tudou have failed to excite investors.
One of the items regulators have been looking is a controversial Chinese corporate structure, Variable Interest Entity (VIE). This structure has allowed Chinese companies to list their shares in US Exchanges through “reverse mergers” — a practice that has drawn the scrutiny of US regulators, due to a string of accounting irregularities among these companies. Now, VIEs have come under the scrutiny of Chinese regulators, the China Securities Regulatory Commission (CSRC), which has asked the State Council to take action against VIEs.
You’d think that with double-digit industry sales growth in the first half of this year, China’s richest retailers would have an easy time increasing their wealth from a year earlier on the new Forbes China Rich List.
Yet retailers were a mixed group. That was in part because the industry’s brisk growth is attracting increasing stiff competition, from electronics suppliers to supermarkets. It’s also because some of the older players haven’t been fast enough to address changes in taste, and in a competitive landscape like China’s, it’s easy to fall behind in a hurry.
In what could turn out to be a key development in the unfolding Yahoo saga, investors Silver Lake, DST Global, Temasek Holdings and Yunfeng Capital are leading a $1.6 billion tender offer for shares of closely held Alibaba Group, sources say. The news was reported this morning by AllThingsD; Forbes has confirmed the story with a source close to the situation.
The deal, which is intended primarily to offer liquidity to Alibaba employees, valued the company at $32 billion. That would give Yahoo’s 39% stake in the company a value of $12.48 billion. Keep in mind, though, that the value of Yahoo’s stake would be reduced by liquidity issues and tax liabilities.
A Silicon Dragon tech economy began in 2002 with Chinese returnees – so-called sea turtles who came home to lay their eggs – who cloned Google, YouTube, and Amazon, grabbed Sand Hill Road money, and scored on NASDAQ and the NYSE. Today, homegrown Chinese entrepreneurs are snapping up venture capital from Chinese currency funds for even more clones – Beijing techie Wang Xing alone has cloned Facebook, Twitter, and a Chinese GroupOn.
The needle is gradually moving from “made in China” to “invented in China.” Micro-innovations tweaked for the local culture are cropping up more often. Sina’s Weibo, a hybrid Twitter-Facebook, layered in video and photo sharing before Twitter did. The long-awaited promise of disruptive technology from China is coming, too, symbolized by China’s climb to fourth place worldwide for new patent applications.
Its fashionable these days to talk about how Americas in the dumps. Stocks go up and down by a few hundred points every day – gyrating on the latest rumor. According to MITs Andrew Lo, since 1980, 10 of the biggest 20 daily upswings and 11 of the large…
Not many young Internet companies are able to catch the attention of Wal-Mart. Yet Chinese e-commerce site 360buy earlier this year held talks involving hundreds of millions of dollars of investment by the global retail giant.
Ultimately, however, 360…
