Wednesday Tech Briefing: Tesla, Alibaba, Google
BIG TECH COMPANIES
1. Alibaba to Merge Food Delivery Units
What: E-commerce giant Alibaba Group plans to merge its food delivery and lifestyle platforms Ele.me and Koubei, sources told Reuters. Alibaba is also trying to raise between $3 billion and $5 billion for the combined business, which could have a valuation of up to $25 billion.
Why it’s important: Competition in China’s hotly contested multibillion-dollar online food delivery sector is getting even more intense. Alibaba, which completed its acquisition of Ele.me in April, is fighting for market share against Tencent-backed rival Meituan. Ele.me plans to spend 3 billion yuan ($443 million) in coming months to expand its market share, seeking to expand its market share to 50%. (Source: Reuters)
2. Elon Musk Considers Taking Tesla Private
What: Elon Musk is considering taking Tesla private at $420 a share, valuing the company at about $71 billion. As a public company, Tesla is “subject to wild swings in stock price” and short-term pressure to raise revenue, Musk said in a statement.
Why it’s important: Tesla, the world’s largest electric car company, faces pressure from shareholders for burning money. Last month, Tesla signed agreements with Shanghai authorities to set up its first China vehicle assembly plant. The first cars are expected to roll off the production line in about three years. Tesla said it would use local debt to fund its factory in Shanghai. (Source: Company statement)
3. Despite Google’s ‘Huge Blunder,’ Communist Party Newspaper Sees Hope for Search Giant in China
What: Global search leader Google LLC made a “huge blunder” by deciding to shutter its China-based search engine in 2010, but should be allowed back into the country if it plays by Beijing’s strict rules for media oversight, the official newspaper of the country’s ruling Communist Party said.
Why it’s important: Google made global headlines last week after The Intercept reported that the company was secretly developing a new version of its search engine for China, which requires all websites to strictly police themselves for sensitive content.
Robin Li, CEO of China’s search giant Baidu, later said he was confident he could defeat Google if it re-entered China.
Big picture: Google withdrew from the country in 2010 after a high-profile dispute over censorship. But the company has maintained a presence through its Android operating system, which powers the vast majority of smartphones in the world’s largest smartphone market. (Source: Caixin)
4. Taiwan Chipmaker Back Online After Outbreak of Virus
What: Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), a major supplier of core processors to iPhones, said full operations have resumed after a virus outbreak shut down some of its major production facilities over the weekend.
It stated that it wasn’t the target of a hacking attack and that neither data integrity nor confidential information was compromised.
Why it’s important: The attack will cause wafer shipment delays in the third quarter, and over the same period will reduce revenue by no more than 2% and cut the gross profit margin by around 1 percentage point, TSMC said in a statement Monday.
Based on the company’s earlier third-quarter estimates, losses will amount to as much as $170 million.
Big picture: TSMC is the world’s largest contract chipmaker, counting Apple Inc., Advanced Micro Devices Inc., Qualcomm Inc. and Nvidia Corp. among its customers. (Source: Caixin)
5. Xiaomi Announces Partnership with Shanghai Government
What: China’s Xiaomi announced a partnership with the Shanghai government in the areas of fintech, internet of things and industrial design, aimed at promoting local technological innovation.
Why it’s important: Xiaomi is the world’s fourth-largest smartphone company, with 33 million devices shipped in the second quarter. The newly listed company is valued at $55 billion in Hong Kong. (Source: Shanghai Dragon Television)
DEALS AND FUNDRAISING
6. WeChat Marketer Banks on Tencent Ties for IPO
What: Marketing-solutions provider Weimob Inc. has filed for an initial public offering (IPO) in Hong Kong, tapping into its strong ties with Tencent Holdings Ltd. for capital.
The company plans to use 50% of the proceeds to enhance research and development capabilities and expand its products offerings. The filing didn’t reveal the offering price range or fundraising size.
Why it’s important: Weimob is currently the largest third-party service provider on Tencent’s WeChat for small and midsize businesses by revenue and by number of paying merchants, according to consultancy Frost & Sullivan. It had 2.6 million registered merchants and over 51,000 paying clients as of December.
Big picture: Weimob is the latest Chinese tech company to tap capital in Hong Kong to raise funds. Last month, online real estate company E-House filed an IPO to raise as much as HK$5.7 billion ($726,000). (Source: Caixin)
Compiled by Zhanqi Ye
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