|Bid||2.2700 x 45100|
|Ask||2.2800 x 3200|
|Day's Range||2.0300 - 2.4500|
|52 Week Range||1.3300 - 51.3800|
|Beta (5Y Monthly)||N/A|
|PE Ratio (TTM)||N/A|
|Earnings Date||Nov 13, 2019|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||46.60|
The latest 13F reporting period has come and gone, and Insider Monkey is again at the forefront when it comes to making use of this gold mine of data. Insider Monkey finished processing 821 13F filings submitted by hedge funds and prominent investors. These filings show these funds' portfolio positions as of March 31st, 2020. […]
(Bloomberg Opinion) -- Famed investor Carl Icahn couldn’t save an American emblem, Hertz Global Holdings Inc. So why does a Beijing-backed enterprise think it can rescue China’s largest car rental company? With its prospects for fresh capital dimming, Car Inc., which shares a chairman with scandal-hit Luckin Coffee Inc., says it’s selling a stake to Beijing Automotive Group Co., the Chinese joint venture partner for Daimler AG-owned Mercedes-Benz and Hyundai Motor Co. BAIC plans to buy up to 21.26%, or a maximum 450.8 million shares, the entire ownership of parent UCAR Inc. That would make the state-owned entity the second-largest shareholder behind Legend Holdings, parent of computer maker Lenovo Group Ltd. Another agreement that was in the works between UCAR and a vehicle linked to private equity giant Warburg Pincus LLC will be terminated. Investors cheered Monday’s news, with the stocks and bonds rising from near rock-bottom. The sale would help sever ties between Car Inc. and Luckin and, in theory, reduce further fallout from the scandal engulfing the coffee chain and Chairman Charles Lu Zhengyao that has riled regulators. But the rescue doesn’t make much strategic or financial sense for either Car Inc. or BAIC.The last thing BAIC needs in the current auto market, which was sagging even before the pandemic, is the stress of a troubled rental company and all the strings attached. The auto giant’s first-quarter results showed that net profit declined 95% on year. The local Beijing brand posted a loss of 1.4 billion yuan ($196 million). Mercedes-Benz was better off because premium-segment demand has held up. Sales volume halved on the Hyundai side. BAIC is already playing rescuer elsewhere, bolstering dealerships with financial support like payable extensions, interest waivers and higher subsidies.What BAIC will — or can — do for Car Inc. through such an arrangement is unclear. The company may end up being a sink for BAIC. The rental business relies heavily on financing and needs capital with high costs on vehicle acquisitions and other such operations. UCAR, the parent, has also been a source of revenue for Car Inc. through fleets; what happens to those relationships once ties are cut will be in doubt. Car Inc. has to deal with the residual value of its cars because in China, manufacturers don't offer guaranteed depreciation or repurchase programs. The company also has guaranteed subsidiary borrower loans onshore along with other shadow financing arrangements. It will be on the hook if there are any defaults. The rental company’s future, with or without a savior, was already up in the air. Moody’s Investors Services expects its leverage ratio to rise over the next 12 months as revenues and demand fall. The cancelled sale of the second tranche of shares to Warburg would have made the firm Car Inc.’s largest shareholder, and could have eased worries about governance and capital shortages, according to S&P Global Intelligence. UCAR sold the first portion — a 4.65% stake — in April to the U.S. firm.This raises several questions for Car Inc. bondholders should BAIC eventually buy the entire stake. UCAR had pledged the shares as collateral for some loans last June. Now, there’s the risk of a change of control event and accelerated debt repayments. Any modifications to the ownership, that is, if the cumulative stakes of major shareholders fall below a 35% threshold, would trigger the clause.There are other considerations. Does Daimler want a part of this? The German company owns 30% of BAIC’s Hong Kong-listed shares. The stake sale, if completed, could open it up to the risk of helping Car Inc. That may weigh on its Chinese partners’ financial standing domestically if Daimler is pushed to support the rental firm’s business.It’s one thing to bail out a good company with a bad balance sheet. But Beijing’s modus operandi of rescuing all companies and banks lands it just where it doesn’t want to be: holding the bag for many bad actors. Consider this: In March last year, UCAR took a 67% stake in an entity related to BAIC through a complicated transaction. It still hasn’t fully paid back the equity portion, according to local media reports. It also owes principal and interest payments. Perhaps this is the way in to get some money back? Either way, this bailout looks wrong. The imminent arrival of a white knight does little in the way of reorganizing or fixing this business; it just shifts around liabilities and a web of ties. Investors shouldn’t rejoice too soon. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Anjani Trivedi is a Bloomberg Opinion columnist covering industrial companies in Asia. She previously worked for the Wall Street Journal. For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Alibaba (NYSE:BABA) stock investors just can't seem to catch a break. Between the trade war, the novel coronavirus and now fears over a potential U.S. delisting, the stock has been bombarded with negative headlines over and over.Source: Kevin Chen Photography / Shutterstock.com None of these headlines have anything directly to do with the company or its business. And it's likely none of them will ultimately have any impact on the company's long-term valuation.The Holding Foreign Companies Accountable Act requires all companies listed on U.S. exchanges to certify "they are not owned or controlled by a foreign government." In addition, these companies would be delisted if their auditors aren't certified by the Public Company Accounting Oversight Board after three consecutive years of inspection. And the bill specifies that companies can't simply delist from the Nasdaq or the NYSE and trade on the OTC market as a loophole.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 7 Red-Hot Biotech Stocks Racing to Develop a Coronavirus VaccineI am a Alibaba stock investor. I will also be the first to admit that the company most certainly operates under the influence of the Chinese government. But I don't see a potential U.S. delisting as a problem for several reasons. Delisting Alibaba Stock Is Likely a BluffIt's election year. There's a lot of anger in the world about Covid-19. Some people argue that China is rightfully to blame for allowing conditions in wet markets that are conducive to viral mutations. Others argue that blaming Chinese culture for the virus is judgmental and even racist. But between the virus, the trade war, and fraudulent U.S.-listed Chinese companies like Luckin Coffee (NASDAQ:LK), there's a lot of hostility toward China these days among U.S. voters.In other words, going after Chinese stocks is low-hanging fruit for politicians. Passing some financial crackdown law on Chinese companies is an easy way for politicians to appear "tough on China," whatever that means. Meanwhile, I doubt even President Donald Trump actually cares about protecting investors. I think he cares about winning the trade war, and this crackdown is his latest leverage. Delisting May Be DifficultLet's assume Congress passes the bill and regulators actually attempt to enforce it. It may be more difficult to gain access to Alibaba's accounting than it seems. Americans actually own shares of Alibaba Group Holding Corp, not Alibaba itself. Alibaba stock represents shares of a variable interest entity (VIE) that is headquartered in the Cayman Islands, not China. So the VIE is listed in the U.S., not Alibaba itself. See what I'm getting at?I'm sure the company has made sure the VIE's accounting as clean as a whistle. I'm not a lawyer or an accountant. But I could easily see how trying to access the company's accounting through the VIE could be difficult. It might even be virtually impossible.Alibaba launched a dual listing in Hong Kong just last year. That gives the company flexibility that other Chinese companies may not have.For example, if U.S. regulators ultimately delist Alibaba stock, it won't happen overnight. Investors may simply be able to transfer their shares to a U.S. broker that allows trading in Hong Kong stocks and covert to Hong Kong shares. They may also receive cash for their shares for a valuation roughly in-line with the company's Hong Kong valuation. Alibaba May Simply ComplyBut potentially the most likely outcome is that nothing at all happens to Alibaba stock. Alibaba CFO Maggie Wu recently told investors that the company has been an SEC filer since 2014. She said the company stands behind the integrity of its accounting."Alibaba's financial statements are prepared in accordance with U.S. GAAP and since our inception in 1999, we have been audited by PwC Hong Kong, PwC Hong Kong is the local affiliate of the worldwide PwC's firm, and its auditing standards are overseen by the PwC national office in the United States," Wu said.In fact, the company was reportedly investigated by the SEC back in 2016 for its accounting practices. Nothing major seemed to come to light as a result of that investigation.U.S. investors seem to assume all Chinese numbers are illegitimate. But if the company actually does want to comply and remain listed in the U.S., maybe the new law will finally help eliminate much of the valuation gap between it and Amazon.com (NASDAQ:AMZN).The delisting news has rattled Alibaba stock, even though the company keeps putting up one impressive quarter after another. Traders should expect more weakness in the near term until the market gets more clarity about the situation.However, at this point, the new compliance requirements could easily turn out to be as much of a blessing as a curse for Alibaba stock in the long term.Wayne Duggan has been a U.S. News & World Report Investing contributor since 2016 and is a staff writer at Benzinga, where he has written more than 7,000 articles. Mr. Duggan is the author of the book Beating Wall Street With Common Sense, which focuses on investing psychology and practical strategies to outperform the stock market. As of this writing, Wayne Duggan was long BABA. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * The Huge Story for 2020 & Beyond That You Aren't Hearing About * Revolutionary Tech Behind 5G Rollout Is Being Pioneered By This 1 Company * The 1 Stock All Retirees Must Own The post Alibaba Stock Bulls Shouldn't Sweat Delisting appeared first on InvestorPlace.
Exchange-traded fund managers who have been tracking Luckin Coffee's US$400 billion convertible bond issued in January will likely have to sell out if the US Nasdaq exchange follows through on its intention to delist its shares.The bonds are convertible into Luckin Coffee's American depositary shares (ADS) before they mature in 2025. Refinitiv's benchmark is tracked by a US$1.02 billion exchange-traded fund managed by State Street Global Advisors.Refinitiv's move came ahead of the Nasdaq exchange's decision to delist Luckin Coffee's ADS earlier this month, which the Xiamen-based start-up has said it plans to appeal.The Refinitive index, which comprises over 200 constituents, is tracked by State Street Global Advisors' SPDR Thomson Reuters Global Convertible Bond ETF that held US$2.75 million worth of the Luckin Coffee bonds, an April filing from Bloomberg showed. A State Street spokeswoman declined to comment on the ETF. With at least another US$10.8 million worth of Luckin Coffee's bond still held by asset managers State Street and BlackRock as part of their ETF portfolios, Luckin Coffee's accounting scandal has highlighted how passive investors in ETFs can get stuck in investments, even if an underlying stock is earmarked for delisting.It also underscores the importance of checking the fine print of when and under what circumstance an index provider will stop tracking a security. The solace for passive investors is that ETFs track the broader market in a well-diversified portfolio.A spokeswoman at Refinitiv Benchmark Services in London said Luckin Coffee's convertible bond was removed due to the bond having fallen below its internal outstanding issue threshold for five straight weekdays. The bond has lost 75 per cent of its value since early March.Apart from Refinitiv, a Bloomberg Barclays convertible bond index series also includes Luckin Coffee's bond as a constituent. It is tracked by another State Street managed ETF listed on the New York Stock Exchange, which owned US$9.37 million of Luckin Coffee's convertible bond, a May filing by Bloomberg showed. Bloomberg declined to comment on the index's methodology.Another US-listed ETF, managed by BlackRock, iShares Convertible Bond ETF, has a smaller exposure of US$1.43 million to Luckin Coffee's bond, a May filing by Bloomberg showed. The ETF also tracks the Bloomberg Barclays index, which is rebalanced at the end of every month.A rebalancing could result in bonds dropping out of an index. BlackRock did not reply to SCMP's emailed questions about its inclusion criteria. It was unclear how many other indices have included Luckin Coffee's convertible bond among their constituents.Luckin Coffee's Lu Zhengyao celebrates IPO on Nasdaq. Photo: finance.china.com.cn alt=Luckin Coffee's Lu Zhengyao celebrates IPO on Nasdaq. Photo: finance.china.com.cnLuckin Coffee's chairman Charles Lu Zhengyao's is attempting to rebuild investors' confidence in the scandal-hit company that disclosed fabricated transactions by staff that amounted to 2.2 billion yuan (US$310 million).If Luckin Coffee is delisted, its convertible bonds would likely drop out of indices, said Skander Chabbi, BNP Paribas Asset Management's head of convertible bonds in Paris.Luckin Coffee's convertible bond is due to pay its first coupon, at 0.75 per cent, on July 15. The bond last traded at 27.5 US cents on a dollar last week; such a distressed level implies a high degree of likelihood in default, one analyst said. These investors are likely specialists in appraising the value of stressed firms."For a bond that is trading at a steep discount, the investor base would no longer be traditional fund managers but [instead] the high yield, distressed debt players who would seek to profit from the recovery of the bond value," said Chabbi.Passive investors also need to be clear, if Luckin Coffee enters administration their claims are likely to be towards the back of the queue of creditors.Earlier this month, a group of banks led by Credit Suisse filed liquidation requests to the British Virgin Islands' court, where chairman Lu's family trust has domiciled its investment vehicle, as they try to recoup losses on more than US$500 million in margin loans. Credit Suisse was also a joint bookrunner for the convertible bond.Among large companies in Asia, 20 per cent use international finance centres, such as the British Virgin Islands, and a further 36 per cent plan to engage with them in the next 12 months, according to a report by research and analysis firm East & Partners.Additionally, lawyers said if eventually Luckin Coffee's business fails in China, employees and suppliers' claims would come ahead of offshore creditors' demands.Luckin Coffee operates in mainland China so potential claims on its assets from onshore creditors, including their employees, would likely prevail over Luckin Coffee's offshore creditors and shareholders in the Cayman-Islands incorporated US-listed company.So for investors in Luckin Coffee's convertible bond, what's brewing at the three-year-old coffee chain smells hard to swallow.This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2020 South China Morning Post Publishers Ltd. All rights reserved. Copyright (c) 2020. South China Morning Post Publishers Ltd. All rights reserved.
A new report by The Wall Street Journal attempts to shed light on just how pervasive the company's accounting scandal could be.
Luckin Coffee Inc. (NASDAQ: LK) is in more trouble. This week, new details on the Chinese coffee chain's accounting practices are unfortunately dominating headlines. Why? Under previous company management, executives purportedly juiced financials by creating vouchers to sell to fake buyers connected to the company.
Shares of Luckin Coffee (NASDAQ: LK) jumped more than 20% on Wednesday, continuing the stock's rally off its recent lows. After being hit with an accounting scandal, executive terminations, and a Nasdaq delisting notice, Luckin Coffee's stock went on to suffer devasting losses of more than 95% from its all-time highs reached back in January. Reuters reported on May 24 that restaurant giant Yum China and Tencent-baked Tim Hortons could be exploring the possibility of purchasing some of Luckin Coffee's assets, including its popular mobile app and extensive customer data.
It might seem as if things couldn't get worse for Luckin Coffee (NASDAQ: LK). In early May, after its chief operating officer and other associated employees resigned amid allegations of fabricating meaningful amounts of Luckin's sales, Luckin's stock plunged and was subsequently halted for several weeks. During the trading halt, Luckin's CEO was later fired as well, as apparently a deeper malfeasance was discovered at the company in the meantime.
The stock market moved higher on Tuesday, reflecting rising optimism among investors about the prospects for a return to more normal business conditions in the coming weeks and months. Public health officials fear that relaxed mitigation efforts could bring back a resurgence of COVID-19 outbreaks, but progress on several fronts toward a possible vaccine also made market participants more comfortable. The Dow Jones Industrial Average (DJINDICES: ^DJI) led the way with a greater than 2% gain, with smaller rises for the S&P 500 index (SNPINDEX: ^GSPC) and Nasdaq Composite (NASDAQINDEX: ^IXIC).
Rumors of asset sales could be spiking investors' interest in the beleaguered Chinese coffee-shop chain.
(Bloomberg Opinion) -- China’s decision to impose a national security law on Hong Kong has spurred speculation of capital flight and an erosion of the city’s status as an international financial center. As a venue for share offerings, at least, the near-term future is looking bright. For that, the territory can thank worsening U.S.-China relations.U.S.-listed Chinese technology companies are lining up to sell stock in Hong Kong, seeking refuge from an environment that has become increasingly less hospitable. Nasdaq-traded JD.com Inc. and NetEase Inc. are planning secondary listings in the city next month, following a trail blazed by Alibaba Group Holding Ltd. in November. Optimism that more companies will join them drove shares of Hong Kong’s exchange operator up more than 6% on Monday.There’s every reason to expect these stock offerings to do well, and push Hong Kong back up the rankings of the world’s largest fundraising centers. So far this year, the city is the sixth-largest market by capital raised. It topped the table for the whole of 2019 when New York-listed Alibaba sold $13 billion of stock, underscoring the existence of a strong local investor base for China’s most successful companies.The reception for Alibaba suggests that Asian institutional investors want to be able to trade China’s leading enterprises in their own time zone. JD and NetEase are also among the nation’s technology champions. Beijing-based JD competes with Alibaba in e-commerce, while Hangzhou-based NetEase is behind some of the most popular mobile games in China. Beyond these two, search-engine operator Baidu Inc. is considering delisting from Nasdaq and moving to an exchange nearer home, Reuters reported last week. The coronavirus has exacerbated tensions between Washington and Beijing, while scandals such as fabricated sales at Luckin Coffee Inc. have spurred politicians to push for tighter regulation, giving Chinese companies an incentive to list elsewhere.Hong Kong is an obvious choice. The city burnished its appeal for U.S.-traded companies last week when the compiler of the city’s benchmark Hang Seng Index said it would change its rules to admit secondary listings and companies with dual-class share structures. Stocks that join the benchmark can expect inflows from passive investors such as exchange-traded funds that track the index.Citigroup Inc. reckons that 23 of the 249 Chinese stocks traded in the U.S. meet Hong Kong’s criteria for a secondary listing, which require companies to have a market value of $5.2 billion or, alternatively, a combination of $129 million in annual sales and a $1.3 billion market cap. JD tops the group with a value of $73 billion.An even more alluring prize would be inclusion of secondary listings in Hong Kong’s stock-trading links with the Shanghai and Shenzhen exchanges, which would enable mainland Chinese investors to buy these shares. Alibaba wasn’t included in the stock connect, to the disappointment of some investors. China’s government could yet decide to make this happen.It’s a reminder that Beijing has levers at its disposal to help shore up Hong Kong’s economy and financial industry, which accounts for a fifth of the city’s gross domestic product — as it did after the SARS epidemic in 2003, when half a million people demonstrated against the Hong Kong government’s first, aborted attempt to introduce national security legislation. Hong Kong Exchanges & Clearing Ltd. surged the most in 18 months Monday even as unrest returned to the city. Listing of American depositary receipts may double the exchange operator’s revenue, Morgan Stanley said. The Hang Seng Index, meanwhile, stabilized after slumping 5.6% on Friday.An exodus of businesses, people and capital may yet imperil Hong Kong’s role as an international financial center. The IPO outlook suggests that, rather than a sudden demise, that’s likely to be a long drawn-out process. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
What’s bad news for investors in U.S.-listed China-based stocks is good news for short sellers, who made back almost everything lost this year after the Senate approved the Holding Foreign Companies Accountable Act.
Senate legislation builds in a three-year grace period, meaning New York will remain home to Chinese companies’ listings for some time.
In this episode of Industry Focus: Wildcard, Emily Flippen and Motley Fool analyst Bill Mann talk about financial fraud in the international space. They look at the example of Luckin Coffee (NASDAQ: LK), giving insight into the challenges of researching foreign companies, some hints on spotting discrepancies, and a look at whether you should worry about investing in foreign companies.
Shares of Luckin Coffee (NASDAQ: LK) plummeted on Friday as myriad negative factors continued to weigh on the beleaguered Chinese coffeehouse chain. As of 1:36 p.m. EDT, Luckin's stock was down more than 30%. Luckin Coffee's stock crashed in April after the company disclosed that it was investigating its chief operating officer for allegedly inflating sales by hundreds of millions of dollars.
Ahead of earnings, should you buy Alibaba (NYSE:BABA)? The novel coronavirus took some wind out of the company, but China's in recovery mode. Growth remains in motion for the company's e-commerce and cloud computing businesses. In short, there's good reason why investors have bid Alibaba stock higher in recent weeks.Source: Kevin Chen Photography / Shutterstock.com Granted, shares haven't retraced prior highs set in January. Yet, with shares still below the high-water mark, now may be the time to buy. As China puts coronavirus in the rear-view mirror, shares could continue to bounce back.Recent backlash over U.S.-listed Chinese stocks may give you pause. The risks of the U.S.-China trade war resuming is another key risk. But, with these factors priced into shares, don't let this keep you away from this opportunity.InvestorPlace - Stock Market News, Stock Advice & Trading TipsLet's dive in, and see why Alibaba stock could be a strong buy before earnings. E-Commerce, Cloud Growth and Alibaba StockAs our own Matt McCall recently wrote, "investors are flowing into what's working." In other words, shares in hard-hit airline and retail stocks remain far below prior highs. But, coronavirus hasn't really affected big tech stocks. As a result, these names have recovered faster than the overall market. * 7 Excellent Penny Stocks Ready to Roar But that's not the only thing working in this company's favor. Consider the fact that China is largely over the pandemic.As D.A. Davidson's Gil Luria recently put it, "China is the only big country that is really past the peak of the pandemic." While the Western world struggles to "return to normal," China's in full recovery mode.This bodes well for Alibaba's continued growth in their e-commerce and cloud computing businesses. In short, shares could continue moving back to prior highs (around $230 per share). And beyond.Over the next fiscal year (ending March), analyst consensus calls for sales to grow from $71.2 billion to $92.5 billion. In other words, nearly 30% revenue growth.Earnings could climb 20% in the next year, from $7.01 per share, to $8.45 per share. Yes, earnings growth may be slower than revenue growth. But, like it's American counterpart, Amazon (NASDAQ:AMZN), you aren't buying Alibaba for its current earnings.Instead, you are buying for the company's ability to scale into a much larger business down the road. Once growth takes a breather, the company can "cash the check." That is to say, increase margins, resulting in a highly profitable business.Yet, despite these strong points, there are some concerns to keep in mind. While largely priced into shares, they are still caveats to consider. Geopolitical Risks Holding Back ValuationAs InvestorPlace's Mark Hake discussed May 19, Amazon stock has moved much higher year-to-date compared to Alibaba. Why is that the case? There are two key reasons why investors have been afraid to bid up this stock in the same way they've done with its American counterpart.Firstly, there are valid concerns over a reinvigorated U.S.-China trade war. As you may remember from last year, the trade war was bad news for this stock. Shares largely tread water for most of 2019, only moving higher once the battle cooled down in December 2019.Secondly, the recent backlash over US-listed Chinese stocks. After the Luckin Coffee (NASDAQ:LK) fiasco, there's great concern over the reliability of Chinese financial statements. As a result, some are calling for stricter regulations.Proposed legislation moving through the U.S. Congress could mean a delisting of Chinese companies from U.S.-based stock exchanges. Even if names like Alibaba aren't forced out, the hassle of complying with new laws may compel them to de-list voluntarily.The specter of increased U.S. regulation could explain the company's 2019 Hong Kong IPO. With this new listing, the company has less of a need to continue trading in the U.S.In short, it makes perfect sense why shares remain "cheap" relative to Amazon. Alibaba stock trades for a forward price-to-earnings (P/E) ratio of 31. Amazon shares sport a forward P/E of 121.4.Yet, this valuation discrepancy may be an opportunity, not a red flag. Geopolitical risks could be priced into shares. In other words, today's valuation may be a strong entry point. Despite Risks, Consider Alibaba Stock a BuyWeakening US-China relations may be holding this stock back. But, don't let these concerns scare you away. With China in recovery mode, the company's growth prospects in e-commerce and cloud computing remain in motion.Earnings hit the street pre-market on May 22. If the company meets expectations, shares could climb further. Tread carefully due to the geopolitical risks. But consider Alibaba stock a buy at today's prices.Thomas Niel, contributor to InvestorPlace, has written single-stock analysis since 2016. As of this writing, Thomas Niel did not hold a position in any of the aforementioned securities. More From InvestorPlace * Top Stock Picker Reveals His Next 1,000% Winner * America's Richest ZIP Code Holds Shocking Secret * 1 Under-the-Radar 5G Stock to Buy Now * The 1 Stock All Retirees Must Own The post Tread Carefully, but Continued Growth Makes Alibaba Stock a Buy appeared first on InvestorPlace.
(Bloomberg) -- Netease Inc. aims to list shares in Hong Kong on June 11 and JD.com Inc. a week after, a person familiar with the matter said, completing two mega stock sales for the city at a time of escalating market volatility.U.S.-listed Netease and No. 2 Chinese online retailer JD hope to gain approval for local debuts during listing-committee hearings on Thursday, the people said, asking not to be identified discussing private matters. JD’s stock sale could raise $2 billion or more to help the e-commerce giant shore up its position in an increasingly competitive home market. The retailer’s June 18 target coincides with its largest annual online sales event.The twin debuts follow Alibaba Group Holding Ltd.’s $13 billion Hong Kong stock sale last year, hailed as a homecoming for Chinese companies and a win for Hong Kong Exchanges & Clearing Ltd., which lost many of the largest tech corporations to U.S. bourses because it didn’t allow dual-class share voting at the time -- a requirement that’s since been relaxed. Netease and JD are also listing at a time of escalating tensions between Washington and Beijing, now spilling over into Chinese companies’ access to U.S. capital markets after the downfall of Luckin Coffee Inc. -- one of the country’s brightest startups.Representatives for JD, Netease and Hong Kong’s exchange declined to comment.Read more: JD Is Said to File for $2 Billion Hong Kong Second Listing Shares in U.S.-listed Chinese companies have see-sawed since senators overwhelmingly approved legislation Wednesday that could bar the country’s firms from American exchanges. The decision cast a pall of uncertainty over hundreds of billions of dollars of shares in some of the world’s best-known companies. China this week also moved towards national security legislation for Hong Kong, sowing panic in the city’s $5 trillion stock market.Read more: Hong Kong Stocks Crash On New Concern Over City’s FutureEven if the delisting bill is eventually approved, the impact on China’s largest tech corporations remains unclear. American lawmakers have long raised red flags over the billions of dollars flowing into the Asian country’s biggest firms, much of it from pension funds and college endowments in search of fat investment returns. Alarm has grown in particular that American money is bankrolling efforts by the country’s technology giants to develop leading positions in everything from artificial intelligence and autonomous driving to internet data collection.Baidu Inc. founder Robin Li told the state-backed China Daily the company was concerned about heightened scrutiny of Chinese companies and was constantly exploring options including a secondary listing in Hong Kong or elsewhere.For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Lenders led by Credit Suisse Group AG have targeted the family assets of Luckin Coffee Inc. Chairman Lu Zhengyao as they try to recoup losses on more than $500 million in soured margin loans.Credit Suisse is seeking a court order to appoint liquidators for Haode Investment Inc., according to a notice in the BVI Gazette on Thursday. Haode, controlled by Lu’s family trust, defaulted on loans backed by Luckin shares in April, according to a statement from lenders last month. Spokespeople for Credit Suisse and Luckin declined to comment.The liquidation request adds to a long list of challenges facing Lu, who became a billionaire after his fast-growing Chinese coffee chain went public in the U.S. with help from some of the biggest names on Wall Street. Much of Lu’s wealth has been wiped out by a 92% plunge in Luckin’s stock since April, when the company disclosed that some of its employees may have fabricated billions of yuan in sales.Luckin’s fall from grace has made it a poster child for concerns about Chinese corporate governance, fueling a debate in Washington over the extent to which U.S. money and capital markets should be made accessible to firms from a growing geopolitical rival. Nasdaq Inc. plans to delist Luckin’s stock, while the U.S. Senate approved legislation Wednesday that could lead to some Chinese companies being barred from American exchanges.Lu said in a statement on Wednesday that he’s “deeply disappointed” Nasdaq is moving to delist Luckin before the company releases final results of an internal probe into its accounting. Regulators in the U.S. and China are also investigating the coffee chain, while Luckin bondholders have secured a freeze on $160.7 million in assets, according to a May 11 filing in Hong Kong.Banks that participated in the loan facility to Lu’s investment vehicle signaled in April that they plan to sell Luckin shares that were pledged as collateral. It’s unclear whether the banks have started offloading the shares or how much money they’ll be able to recoup.Credit Suisse and Morgan Stanley each put up about $100 million as part of the loan facility, while China’s Haitong International Securities Group lent about $140 million, Bloomberg reported last month, citing a person familiar with the matter. Other banks involved include Barclays Plc, Goldman Sachs Group Inc. and China International Capital Corp.Lu’s investment vehicle has disputed that it’s in default and has requested an injunction against Credit Suisse in Hong Kong to prevent the bank from commencing liquidation proceedings, according to a May 6 court filing.Few banks have seen a bigger fallout from the Luckin saga than Credit Suisse, which was the lead underwriter for Luckin’s initial public offering, a secondary share sale in January and a $460 million issuance of convertible bonds.The bank lost a high-profile Hong Kong IPO in the wake of the scandal and reported a five-fold increase in loan-loss provisions at its Asia Pacific unit, primarily due to the Luckin margin loans. The bank is conducting a review of the case, and scrutiny on loans to Chinese companies has increased, according to people familiar with the matter who declined to be named discussing private matters. China is core to Credit Suisse’s strategy to win business from rich entrepreneurs across Asia.The Swiss bank, which is acting as an agent for the loan facility, filed the liquidation request to the Eastern Caribbean Supreme Court, High Court of Justice, in the British Virgin Islands on April 23, according to the BVI Gazette notice. A hearing is schedule for June 8.(Adds Luckin and bondholders lawsuits.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The banks that lent $518 million to Luckin Coffee <LK.O> Chairman Charles Zhengyao Lu have started court proceedings to liquidate his private company, a government gazette for the British Virgin Islands showed. The notice, published on Thursday and reproduced in Hong Kong media on Friday, names Credit Suisse as the security agent, which means it will act on behalf of the banks behind the loan. Credit Suisse <CSGN.S> has proposed Grant Thornton be appointed as liquidators of Haode Investments Co., Mr Lu's private company, which is registered in the Virgin Islands.
Momentum is building for the House of Representatives to approve sweeping legislation that could ultimately bar many Chinese companies from listing shares on U.S. exchanges. The Senate already has approved the bill.