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TPG-Axon Closes Its Position in Alibaba Group

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TPG-Axon exits Alibaba

TPG-Axon closed its position in Alibaba Group Holding (BABA) by selling all 570,000 shares it had previously held in the company.

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Alibaba joins hands with e-lending firms for lending to small businesses in the UK

Alibaba, in a press release dated March 11, 2015, announced the establishment of strategic partnerships with lending firms iwoca and ezbob to enable UK SMBs (small- and medium-sized businesses) to obtain trade financing more conveniently when they make purchases on Alibaba’s e-commerce website from suppliers based in China. These financing deals represent Alibaba’s maiden financing ventures within Europe.

Strategic investment in leading Chinese smartphone maker

In a press release dated February 9, 2015, Alibaba announced that it has entered into an agreement with Meizu Technology to invest $590 million in the Chinese smartphone manufacturer. The companies are expected to work together to integrate the hardware of Meizu with the mobile OS (operating system) of Alibaba.

Alibaba Group’s chief technology officer, Jian Wang, said, “The investment in Meizu represents a significant expansion of the Alibaba Group ecosystem and an important step in our overall mobile strategy as we strive to bring users a wider array of mobile offerings and experiences.”

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Revenue misses estimates in fiscal 3Q15

Alibaba’s fiscal 3Q15 revenue grew by 40% YoY (year-over-year) to $4.22 billion, but missed consensus estimates of $4.45 billion. The revenue growth was driven by higher revenue from China’s mobile commerce retail business. There was a greater proportion of GMV (gross merchandise volume) generated on mobile devices. Also, there was an increase in the mobile monetization rate.

For China’s retail marketplaces, the GMV increased by 49% YoY due to an increase in active users. This was offset due to category expansion. Mobile GMV accounts for 42% of total GMV transacted in China’s retail marketplaces. Mobile GMV saw a 213% increase YoY in 3Q15 due to growth in mobile MAUs (monthly active users) and an increase in user spending levels. Mobile MAUs grew 95% YoY to 265 million at the end of December 2014.

The company’s net earnings adjusted for one-time charges increased 25% YoY to $2.1 billion in fiscal 3Q15. Non-GAAP (generally accepted accounting principles) diluted EPS (earnings per share) increased 13% to $0.81 in 3Q15 from the corresponding quarter a year ago. This beat analysts’ estimates of $0.75.

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About Alibaba

Founded in 1999, Alibaba is the largest e-commerce player in China. Its services range from online shopping and travel booking to cloud computing. It’s the largest online and mobile commerce company in the world in terms of GMV. Alibaba’s $25 billion IPO (initial public offering) in September 2014 received an overwhelming response. It was the largest IPO in history.

Other e-commerce players include eBay (EBAY) and Amazon (AMZN). Both of these companies are part of the SPDR S&P 500 ETF (SPY). Their portfolios weigh 0.37% and 0.77%, respectively.

As per a BBC article by Leo Kelion dated February 4, 2015, Alibaba commenced trials for delivery by drones (unmanned, remote-controlled aircraft) to several hundred customers in China. Parcel service firm UPS (UPS), Google (GOOG), and Amazon are also involved in conducting private trials of delivery methods using such aircraft.

In the next article, we’ll cover TPG-Axon’s sold position in Vantiv (VNTV).

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