What's Important in the Financial World (1/16/2013)
Alibaba Prepares IPO
Alibaba, the preeminent e-commerce company in China, apparently has decided to have an initial public offering to raise as much as $4 billion. The decision probably is unrelated to the partial retirement of CEO and founder Jack Ma. Alibaba may believe that, with the Facebook Inc. (NASDAQ: FB) IPO debacle now months old, it can tap the markets. According to Bloomberg, Alibaba:
… hired Credit Suisse Group AG and Goldman Sachs Group Inc. to arrange an initial public offering, said two people with knowledge of the matter.
The IPO may raise $3 billion to $4 billion in Hong Kong this year, said one of the people, who asked not to be identified because the information is private. John Spelich, a Hong Kong-based spokesman for Alibaba, declined to comment on the sale plan.
Impending Dell Buyout
The private equity buyout of Dell Inc. (NASDAQ: DELL), about which investors were skeptical just two days ago, could happen soon. Rumors in the press suggest that the primary PE firm in the deal will be Silver Lake Partners and that several banks are prepared to make the loans necessary to close the transaction. The greatest hurdle at this point could be investor lawsuits. The buyout offer is expected to be between $12 and $13 a share. Dell's prospects may have dimmed in the past two years, but investors could insist that the firm is worth more than the $18 at which it traded in the past year. According to Reuters:
Buyout firm Silver Lake Partners, which is leading the deal, tapped Credit Suisse, Bank of America Merrill Lynch, Barclays and RBC late last year to finance a potential deal, the sources said on condition of anonymity, because details have not been made public. JPMorgan is advising Dell on a potential buyout of the $19 billion company, which would be one of the largest deals since the global recession. It will also allow Dell, which has been trying to become a one-stop shop for corporate technology needs as the PC market shrinks, to conduct that difficult makeover away from public scrutiny.
iPhone Sales Speculation
More and more analysts have taken a position counter to the one that says demand for the Apple Inc. (NASDAQ: AAPL) iPhone 5 has fallen. Rumors in the press indicated that suppliers of components have been affected by drops in orders from Apple. According to the Telegraph:
Shaw Wu, an analyst with Sterne Agee, told investors that "as far as we can tell, iPhone 5 demand remains robust". He said that Apple's component order change could be due to "much improved yields meaning lower component builds and supplier shifts". His view was echoed by Mark Moskowitz, of JP Morgan, who said the "order cuts are a direct result of manufacturing yields improving following the fast-and-furious product roll-outs of the iPhone 5 as well as new iPads and Macs". William Power, a Baird analyst, said he was raising his forecast for iPhone sales in the final months of 2012. He added that "most demand indicators remain favorable".
Filed under: 24/7 Wall St. Wire, Market Open Tagged: AAPL, DELL, FB, featured