Reads
- Battered Steel Industry Galvanized Its War Effort
- U.S. Pushes for Business Investment in Africa to Counter China’s Reach
- SVB Mess Festered Under Fed’s Bureaucracy and Feel-Good Culture
- SVB’s Collapse Shows the World’s Favorite Safe Asset Isn’t Risk-Free
- UBS Veteran Ermotti Returns to Lead Credit Suisse Takeover
- US 30-Year Fixed Mortgage Rate Eases to Six-Week Low
- SES, Intelsat Near Deal to Create $10 Billion Satellite Giant
- Alibaba’s $32 Billion Day Signals Breakups for China Tech
- Rift Between Gaming Giants Shows Toll of China’s Economic Crackdown
- What’s Hot on TikTok? Defending Its C.E.O.
- Nvidia’s Sizzling AI-Driven Rally Flashes a Warning
- $335,000 Pay for ‘AI Whisperer’ Jobs Appears in Red-Hot Market
- In Sudden Alarm, Tech Doyens Call for a Pause on ChatGPT
- The Metaverse Is Quickly Turning Into the Meh-taverse
- GameStop Decides It Likes Stores After All
- Pepsi Unveils New Look First Refresh in 14 Years
- Union Showdown: Starbucks’ Howard Schultz Faces Bernie Sanders in the Senate
- He Wanted to Unclog Cities. Now He’s ‘Public Enemy No. 1.’
- The Hidden Ecosystem of Free Vacation Stuff
Todays Open Interest Change
PREMIUM
Prepper
"Come on, baby, let's start anew," Alibaba (BABA) sang in a new hit-single released on Tuesday, with most believing it won't be hard to pull off for the company. Investors were certainly "down dooby doo down down" for the move, sending shares of the Chinese tech giant soaring 14% during the session. Chinese tech stocks rose in tandem, including JD.com (JD), NetEase (NTES) and Tencent (OTCPK:TCEHY), as well as Japanese tech conglomerate SoftBank (OTCPK:SFTBY), which was one of Alibaba's key early investors.
The plan: Alibaba will split into six different units covering e-commerce, media and the cloud, with the goal of boosting each group's individual business value. They include: 1) Cloud Intelligence, 2) Taobao Tmall Business, 3) Local Services, 4) Global Digital Business, 5) Cainiao Smart Logistics, and 6) Digital Media and Entertainment. "Under this plan, we will have six major business groups and other investments, each to be independently managed by its own chief executive officer and board of directors," according to a regulatory filing. Aside from Taobao Tmall Business, which will remain fully owned by Alibaba (BABA), each of the other business groups "will also have the flexibility to raise outside capital and potentially to seek its own IPO."
"With such an obvious and unexpected catalyst on our hands, it pays to explore what exactly this new development could do for BABA shareholders," wrote SA contributor Growth at a Good Price. He explores how to play the restructuring, while other SA authors are also bullish on the announcement. See Alibaba Drops A Bombshell by Investing Group author Jonathan Weber, as well as Alibaba Group: A Great Move Aimed At Boosting Shareholder Value by Daniel Jones.
Go deeper: The reorganization follows years-long headwinds for Alibaba shares, including a slowing economy in China and geopolitical tensions, as well as a broad tech selloff and sweeping crackdown on Chinese internet companies. In fact, the announcement came a day after the company's legendary founder, Jack Ma, made his first appearance in mainland China after several months overseas, and has generally been out of the public eye since he gave a speech in 2020 that criticized Beijing's financial and business regulators. It also raises questions about what may happen with the suspended record IPO of Ant Group, which operates one of China's biggest mobile pay apps called Alipay (Alibaba owns 33% of Ant). (108 comments)
Apple (AAPL) has officially released its "Buy Now, Pay Later" service in the U.S., permitting purchase payments over time with no fees and no interest. Select users can apply for Apple Pay Later loans of $50 to $1,000, which can be managed in Apple Wallet and used for both online and in-app merchants that accept Apple Pay. The solution was initially planned to be released in September 2022 as part of iOS 16, before technical challenges delayed the launch, though Apple now hopes to offer it to all eligible users in the months ahead. Mastercard (MA) and Goldman Sachs (GS) will be helping out Apple with payment credentials, while rival BNPL provider Affirm (AFRM) tumbled on the latest news. Is a bank charter for Apple in the cards? (49 comments)
AMC Entertainment (AMC) was up 10% shortly before Tuesday's market close on a report that Amazon (AMZN) was exploring an acquisition of the beleaguered movie-theater chain. Jeff Bezos has been said to organize his entertainment lieutenants and investment advisers to consider such an acquisition, where hundreds of theaters would be used for a number of purposes like promoting Amazon Prime's original films, cross-selling grocery delivery and even serving as product distribution hubs. AMC had a market capitalization of about $2.6B after Tuesday's jump, though it has slid nearly 72% over the past year. Bezos might also want to wait and see if the stock continues to erode, or jump on a potential bankruptcy. (110 comments)
"In light of the new challenges and priorities," UBS (UBS) is bringing back Sergio Ermotti, who rebuilt and led the bank (from 2011 to 2020) in the aftermath of the global financial crisis. The move will help UBS figure out how to integrate Credit Suisse (CS) into its operations after conducting an emergency rescue of the troubled lender for $3.25B in stock. Ermotti's first challenges will include laying off thousands of staff, rethinking its business divisions and shoring up the confidence of investors, clients and the overall banking sector. Fearful of the bank crisis? SA contributor Jim Sloan discusses the worst potential outcome and where you should put your money now. (137 comments)
Today's Markets
In Asia, Japan +1.3%. Hong Kong +2.11%. China -0.2%. India +0.6%.
In Europe, at midday, London +0.8%. Paris +1.3%. Frankfurt +1%.
Futures at 6:30, Dow +0.7%. S&P +0.8%. Nasdaq +0.8%. Crude +0.9% to $73.87. Gold -0.4% to $1966.50. Bitcoin +5.2% to $28,319.
Ten-year Treasury Yield unchanged at 3.56%
Today's Economic Calendar
7:00 MBA Mortgage Applications
10:00 Fed's Barr Speech
10:00 Pending Home Sales
10:00 State Street Investor Confidence Index
10:30 EIA Petroleum Inventories
11:00 Survey of Business Uncertainty
11:30 Results of $22B, 2-Year FRN Auction
1:00 PM Results of $35B, 7-Year Note Auction
Companies reporting earnings today »
What else is happening...
Lululemon (LULU) legs higher on earnings beat, strong sales forecast.
On the gas: Carl Icahn spent over $220M in March buying this stock.
Pepsi (PEP) unveils new logo and talks digital investments.
FTX founder Bankman-Fried charged with paying $40M bribe.
More layoffs: Lucid (LCID) plans to slash nearly fifth of workforce.
Judge rules Google (GOOGL) should be sanctioned in Epic Games case.
Micron (MU) gets slight lift amid confidence in long-term outlook.
Spicing it up: McCormick (MKC) jumps 10% on latest earnings.
New strategy from the FDA aims to avoid another baby formula shortage.
Here are the top 10 dividend stocks, according to SA's Quant Ratings.