GGV Capital isn’t a household name in the venture capital world. It wasn’t involved in the most high-profile startups of recent years, like Facebook or Groupon. Yet GGV saw the potential in the Chinese Internet scene before most of its peers, and one of its biggest payoffs could come soon in the form of the IPO of the Alibaba Group, China’s largest e-commerce company.
Yahoo’s Marissa Mayer is the CEO du jour. The latest example of her popularity is a spread in the flagship September issue of Vogue, which features a picture of her wearing a blue, sleeveless dress, lying tastefully (if a little uncomfortably-looking) on a white lounge chair, with her blonde hair splayed out like a waterfall and a tablet in her hand. Vogue follows up with a complete week’s worth of outfits chosen for Mayer, from a $4,900 Balenciaga dress to a $4,350 Tiffany watch.
The numbers: Not bad. PC maker Dell reported earnings per share of $0.25, on revenue of $14.5 billion, slightly beating estimates.
Activist investor Carl Icahn is not afraid of going it alone in his investments, and often does. But in his last few high-profile bets, he’s followed other hedge fund managers who made the first move into a company. The difference is that Icahn has the biggest voice in the shareholder world, allowing him to stir things up more than others, and make a lot of money in the process.
Email is either the most efficient or least efficient workplace innovation of the last few decades, depending on how you look at it. One McKinsey study concluded that workers spend the equivalent of 73 full work days a year dealing with email. Flickr co-founder Stewart Butterfield thinks he has found a solution to email’s shortcomings. His latest venture, called Slack, combines group chat, direct messaging and file sharing in an archivable and searchable system.
The numbers: Not good. US department store chain Macy’s reported earnings per share of $0.72 in the second quarter on revenue of almost $6.1 billion, which fell short of analyst estimates. Macy’s shares were down by more than 4% this morning.
It didn’t take long for activist investor Carl Icahn to find his next target—and this time, it’s a big one. He announced today on Twitter that he had taken a “large position” in Apple, saying it was “extremely undervalued” and the company should implement a larger buyback of its shares. As of this writing, the news had pushed Apple’s shares up by some 5%.
The deal to merge US Airways and American Airlines, which would create the world’s largest airline, has suffered a big setback. In a surprising move, the US Justice Department filed an antitrust lawsuit, saying the transaction poses “substantial harm” to consumers. That means US Airways and American will have to offer more concessions, like giving up more take-off and landing slots at airports, to try to win approval, or risk losing the deal all together.
For once, activist investor Bill Ackman backed down. Today, retailer JC Penney announced that Ackman has resigned from the board. As a compromise, the company is naming two new directors to the board, including Ronald Tysoe, a retail industry veteran who was vice chairman of Federated Department Stores, which is now Macy’s.
(Update (Aug. 14): The two former JP Morgan employees have now been charged, according to reports.)
Activist Bill Ackman used to be one of the cool kids on Wall Street. Now he’s become the one everyone loves to hate, with everyone from Starbucks CEO Howard Schultz to fellow hedge fund billionaire Dan Loeb ( a former friend of Ackman’s) throwing barbs at him. It shows how quickly you can rise and fall in the high-school world of Wall Street popularity.
Ailing department store retailer JC Penney can’t get away from drama. In a tumultuous year that has already seen falling sales and a CEO change, activist shareholder and board member Bill Ackman is stepping up his war of words with other directors and calling for a new chief executive. And now, another hedge fund has taken a stake and is backing Ackman in the ouster of CEO Mike Ullman.
It was a busy day for the markets with seven companies starting to trade today on US exchanges after their IPOs. Most of them had a decent first day, like oil pipeline company QEP Midstream Partners, which saw its stock rise by almost 11% on its opening. But by far the star of the day was Cvent, a cloud-based event management platform (think Evite for businesses), which shot up by more than 280% in its debut.
Troubled technology firm BlackBerry is open to the idea of going private, as a way to turn itself around behind closed doors, according to Reuters. BlackBerry could be attractive to a private equity buyer since it throws off a decent amount of cash—it had more than $2.8 billion in cash on its balance sheet as of June 1. But that doesn’t mean BlackBerry’s outlook would improve.
Rapid changes are taking place in the way people buy things, and companies are reacting accordingly. Increasingly, the US is moving toward a subscription-based economy in which firms will focus less on selling things, and more on gaining recurring customers—a trend seen in companies like Netflix, Zipcar and Spotify. That’s according to Tien Tzuo, an evangelist for the subscription-based economy who built his startup, Zuora, around that philosophy.
The Canadian members of the North American potash cartel have done their best to downplay the surprising news that Russia’s OAO Uralkali was pulling out of a rival European potash venture. The world is closely watching to see what the Uralkali move could mean for prices of potash, a key ingredient in fertilizer, and whether the sector moves from being a seller’s to a buyer’s market.
The numbers: Not good. Rio Tinto, the world’s second-largest mining firm, reported a 71% drop in net income (pdf) for the first half of 2013 as against the same period last year. Underlying earnings, which eliminate recurring factors, fell by 18% year-on-year to $4.2 billion.
The big internet IPOs of the last few years have had bumpy rides. Last week, Facebook shares went above their IPO price for only the first time since the company went public over a year ago. Zynga and Groupon have lost billions of dollars in valuation since going public. On the other hand, LinkedIn is now worth about six times the $4.3 billion valuation at which it launched.
The numbers: They were decent. Online coupons company Groupon reported earnings per share of $0.02, which met expectations, while revenue came in at $608.7 million, which slightly beat estimates. The company also announced a $300 million share buyback, which helped boost the shares by almost 14% in after market trading.
The world’s largest private equity firms are facing a problem often confronted by rich individuals: so much money, so little to buy. The situation has put pressure on those companies to find ways to deploy their capital before their time window for spending it expires, which could hurt future fundraising efforts.
Here’s another reason why bigger and older rivals of Chinese mobile phone company Xiaomi should watch out: The firm (just barely) beat Apple in smartphone sales in China during the second quarter, according to research firm Canalys. The news comes amid Xiaomi’s launch of a 799 yuan ($130) smartphone named Red Rice, a product that will likely draw younger and first-time buyers.
When Facebook was in the midst of choosing financial firms to handle its IPO, bankers pulled out all the stops. Some bankers who weren’t even involved in IPOs were asked to set up a Facebook account as part of the effort to get their firm hired, according to sources.
It’s hard to say no to a man at the top of his game. Before settling on Amazon CEO Jeff Bezos, Washington Post CEO Donald Graham solicited prospective buyers for his newspaper a few months ago, according to sources. Several turned him down, while others who were interested were not seen as the kind of buyers that would be good stewards of the Washington Post, which has been under the control of the Graham family for about 70 years.
The fight over nutritional products company Herbalife just got uglier. Activist investor Bill Ackman has accused the George Soros hedge fund of violating insider trading rules when it invested in Herbalife. Ackman has reportedly filed a complaint with the US Securities and Exchange Commission regarding the allegations.
