The book the Outsiders describes these decentralized models as a cornerstone of the best CEOs. Bill Sturitz had a chapter in the book where he used Spin offs to increase shareholder value when he felt a business line was not getting the value it deserved.
Great fucking cover man. Always love watching your videos. You were super inspiring to become as I started to learn about value investing. I hope to always find your videos and continue to watch them for a loooong time! Keep up the great and awesome work!
The fact is that BTC symbolizes the future of cryptocurrency, and traders are wondering if now is the best moment to trade, I feel you should examine the situation more closely before jumping to any conclusion. BTC's price has been fluctuating over the previous days, signaling that the market has become unstable and that is it impossible to anticipate whether it will go bearish or bullish. Others are patient, while others continue to trade with no risk. It all depends on the pattern you're trading and the source of your signal, i earned 27BTC starting with 3.6 BTC in just a few weeks implementing Linda Wilburn daily trades. I managed to collect more than tips and tricks.
I think in the short term it will generate good value for shareholders so on a CAGR basis it might be better. However the separation of the businesses allows them to actively decide whether to work and synergies with other alibaba subsidiaries and if they chose not to synergise then it’s a sign some subsidiaries aren’t competitive enough or bad management could decide to not synergise and degrade alibabas competitive advantage
The only incentive i can think of about doing it is actually selling some of their stake in a shitty business to the public. Maybe lowering the antimonopoly oversight could be another one. To me everything else sounds like pretty much mumbo-jumbo. Outside capital, ipo, why is that needed? It does not change anything. BABA can raise capital and borrow as much as we can imagine, perhaps at better rates and price, so it makes no sense to think that this will create more value. Maybe selling the media business to the public will "Create" value for the shareholder and rob the public, who knows.
Existing shareholders will own the holding company. IPOs mean the holding company will dilute it's shares in exchange for cash which they will either reinvest or return to shareholders
How will it works from a tax prospective. Will the money making businesses now have to pay taxes on all profits and the money losing businesses will now have to dilute or take on leverage to sustaine themselves? If that happens then I don't see the value creation other than maybe higher stock price because they are going to be valued seperatly (not real value creation). Most conglomerates create alot of value simply by the fact that capital can move from one business to the next tax free.
Time will tell - I suspect either BABA holders will receive shares in the other companies when/if IPOs happen, or you'll simply retain the BABA shares and the holding company will be a controlling shareholder in each unit. We should get more clarity as time goes on.
Your shares are for the holding company, which will wholly own or part own the other businesses. The cash produced from the IPOs will go back to the holding company
@JSW the third the cash from the IPO likely won't go back to the holding company. Each company will be in charge of their own finances and all (apart from maybe alibaba cloud) are loss making so will need the money generated from IPO
This whole charade is simply how they give up on their underperforming business units. They will sell down their shares in the local consumer services and digital media businesses at a minimum, while retaining taobao and cloud. They are overly focused on perceptions at alibaba. They don’t want to sell off entire business units all at once. That would be an unacceptable admission of massive failure from management. They ‘spawned’ a lot of businesses, but they all have low fundamental returns and many attract negative attention from regulators. This approach lets them frame their failure as a good thing. In reality, it’s just management’s escape hatch on some really bad investments they should not have made in the first place.
@@InvestingwithTom It must be on my side. These 45 minute advertisements disguised as financial podcasts are really lame. I walk into a different room and I'm wonder what I'm watching and have to skip.
That answered most of my questions that I had from your previous video. Thank you Tom :)
Great summary Tom. Btw I got an Alibaba ad while I watched😂
Haha legendary
The book the Outsiders describes these decentralized models as a cornerstone of the best CEOs. Bill Sturitz had a chapter in the book where he used Spin offs to increase shareholder value when he felt a business line was not getting the value it deserved.
Thank you❤
Really appreciate your BABA updates!
You still powerlifting?
Great fucking cover man. Always love watching your videos. You were super inspiring to become as I started to learn about value investing. I hope to always find your videos and continue to watch them for a loooong time!
Keep up the great and awesome work!
The fact is that BTC symbolizes the future of cryptocurrency, and traders are wondering if now is the best moment to trade, I feel you should examine the situation more closely before jumping to any conclusion. BTC's price has been fluctuating over the previous days, signaling that the market has become unstable and that is it impossible to anticipate whether it will go bearish or bullish. Others are patient, while others continue to trade with no risk. It all depends on the pattern you're trading and the source of your signal, i earned 27BTC starting with 3.6 BTC in just a few weeks implementing Linda Wilburn daily trades. I managed to collect more than tips and tricks.
I think in the short term it will generate good value for shareholders so on a CAGR basis it might be better. However the separation of the businesses allows them to actively decide whether to work and synergies with other alibaba subsidiaries and if they chose not to synergise then it’s a sign some subsidiaries aren’t competitive enough or bad management could decide to not synergise and degrade alibabas competitive advantage
Why would the units need to raise capital and IPO? Alibaba was buying back shares massively.
The only incentive i can think of about doing it is actually selling some of their stake in a shitty business to the public.
Maybe lowering the antimonopoly oversight could be another one.
To me everything else sounds like pretty much mumbo-jumbo. Outside capital, ipo, why is that needed? It does not change anything. BABA can raise capital and borrow as much as we can imagine, perhaps at better rates and price, so it makes no sense to think that this will create more value.
Maybe selling the media business to the public will "Create" value for the shareholder and rob the public, who knows.
I agree with a huge amount of what you've said. Time will tell how it plays out!
Any thoughts on if existing shareholders could see an ownership % dilution once these business units start raising more capital via IPOs?
Existing shareholders will own the holding company. IPOs mean the holding company will dilute it's shares in exchange for cash which they will either reinvest or return to shareholders
China is u investable
How will it works from a tax prospective. Will the money making businesses now have to pay taxes on all profits and the money losing businesses will now have to dilute or take on leverage to sustaine themselves? If that happens then I don't see the value creation other than maybe higher stock price because they are going to be valued seperatly (not real value creation). Most conglomerates create alot of value simply by the fact that capital can move from one business to the next tax free.
Soube ia much better! Good job
It seems funny to me that on the last video customer was first... now employees had become first thing to focus on ....
Correction - customer first! I think the translator struggled with that one on the call haha
so what is going to happen to my shares if they have all these new IPOs of the different departments?
Time will tell - I suspect either BABA holders will receive shares in the other companies when/if IPOs happen, or you'll simply retain the BABA shares and the holding company will be a controlling shareholder in each unit. We should get more clarity as time goes on.
Your shares are for the holding company, which will wholly own or part own the other businesses. The cash produced from the IPOs will go back to the holding company
@JSW the third the cash from the IPO likely won't go back to the holding company. Each company will be in charge of their own finances and all (apart from maybe alibaba cloud) are loss making so will need the money generated from IPO
This whole charade is simply how they give up on their underperforming business units. They will sell down their shares in the local consumer services and digital media businesses at a minimum, while retaining taobao and cloud.
They are overly focused on perceptions at alibaba. They don’t want to sell off entire business units all at once. That would be an unacceptable admission of massive failure from management. They ‘spawned’ a lot of businesses, but they all have low fundamental returns and many attract negative attention from regulators.
This approach lets them frame their failure as a good thing. In reality, it’s just management’s escape hatch on some really bad investments they should not have made in the first place.
Any ideas about the CCP's views on the whole thing?
They were probably who suggested it. I feel like they would approve of a monopoly being split up, since they would be less of a threat
CCP controls everything in CHINA
Way too many ads brother
Apologies, just ran with the RUclips automatic placements for this one
@@InvestingwithTom It must be on my side. These 45 minute advertisements disguised as financial podcasts are really lame. I walk into a different room and I'm wonder what I'm watching and have to skip.
Why own the Chinese Amazon, when the real Amazon is on sale? Better company, higher potential returns and no political risk!
Not that big of a sale
The real Amazon does not make enough profits to justify its price