TIME alibaba

Alibaba’s Jack Ma Just Spent $23 Million On a Huge New York Estate

Jack Ma

It's all part of Ma's conservation plan

When you’re worth more than $22 billion, as Alibaba founder Jack Ma is, you can most definitely afford a 28,100-acre property in New York’s Adirondacks complete with a trout fishery, woodlands, and a maple-syrup operation.

Ma shelled out $23 million for the upstate New York estate known as Brandon Park, and has plans to turn it into a conservation area and the “occasional personal retreat,” according to The Wall Street Journal.

The estate includes nine miles of the St Regis River and an array of lakes, ponds, and forests. The Adirondack Almanac looked into the purchase and found the spread-out property includes a 2,200-foot mountain, around 40 miles of roads, and some 20 homes, cabins, and built-up structures.

A non-profit entity will be formed to manage Brandon Park, and it will mark Ma’s first purchase of conservation land outside China, Ma’s spokesman Jim Wilkinson told the Journal. Ma has been leading conservation efforts in China as chairman of the China board of the Nature Conservancy, a global conservation organization. He played a big part in putting together the Laohegou Nature Reserve in Sichuan, the first nature reserve in China managed by a non-governmental organization, according to the Nature Conservancy.

The e-commerce giant he founded, Alibaba, has also followed in Ma’s footsteps, funneling 0.3% of its estimated annual revenue of $12.2 billion into environmental protection, with an emphasis on water and air quality improvement projects.

“The Chinese people really care about environmental protection in China. That will be their greatest contribution to the world,” said Ma in a previous interview.

TIME Shopify

This Tech Company had a Blockbuster First Day of Trading Following IPO

First Day Of Trading for 2015 On The Floor Of The NYSE As U.S. Stock-Index Futures Rise After S&P 500's December Decline
Bloomberg—Bloomberg via Getty Images

E-commerce software company Shopify had a big day after its shares started trading

E-commerce software maker Shopify had a blockbuster Wall Street debut Thursday following an initial public offering with its shares gaining just over 50% in their first day of trading.

The company’s shares gained 51% to close at $25.86, a sharp increase from their IPO pricing of $17.

Investors piled into Shopify early in the day, sending its shares briefly above $28. By the afternoon, the stock fell from its intraday peak but still managed a big gain at the close.

Shopify, which sells software to online merchants to create websites and to process payments, ended the day valued at $1.92 billion. The company raised $131 million in the IPO.

By going public, Shopify joins a small list of other e-commerce-related companies including Etsy and Alibaba that have made their stock market premieres in the past year. Both of those companies, however, have hit turbulence since. Shares in Etsy, the marketplace for handcrafted goods, are now only slightly above their initial pricing after a big initial jump. Shares in Chinese e-commerce giant Alibaba have widely fluctuated since their premiere and are now around the same price as where they ended up on the first day of trading in September.

 

TIME alibaba

Female Executives are Alibaba’s ‘Secret Sauce,’ Founder Jack Ma Says

Jack Ma, billionaire and chairman of Alibaba Group Holding Ltd., during the World Economic Forum in Davos, Switzerland on Jan. 23, 2015.
Bloomberg—Bloomberg via Getty Images Jack Ma, billionaire and chairman of Alibaba Group Holding Ltd., during the World Economic Forum in Davos, Switzerland on Jan. 23, 2015.

The founder of the Chinese e-commerce giant is proud that women hold 34% of his company's leadership roles, which is much higher than Silicon Valley tech companies.

While Silicon Valley is still chasing its tail when it comes to hiring more women, Chinese e-commerce giant Alibaba’s founder, Jack Ma, thinks they’re his company’s “secret sauce.”

He made the comment during Alibaba’s first Global Conference on Women and Entrepreneurship in Hangzhou, China, where the company welcomed high-profile female speakers like the Queen of the Netherlands, actress Jessica Alba, and Huffington Post founder Arianna Huffington. Alibaba used the event to promote female entrepreneurship and showcase its own gender diversity, which puts most tech companies to shame. As of last summer, women made up almost 34% of Alibaba’s high-level managers, and a third of its founding partners. The company also says that more than 40% of its total workforce are women.

“I feel proud that more than 34% of senior management are women. They really make this company’s yin and yang balanced,” Ma said at the conference, according to The Huffington Post. “Women balance the logic and the instinct. I would say this is the ‘secret sauce’ of the company.”

In comparison, women made up only 31% of Facebook’s total workforce and 23% of its leadership; 30% of Google’s overall employees and 21% of its leadership; and 23% of Cisco’s total workforce and 19% of its leadership, according to reports released by the companies last year.

Ma further elaborated that it’s important for his company to have a balance of leadership and ideas to conduct business most effectively.

“Men think about themselves more; women think about others more,” Ma said. “Women think about taking care of their parents, their children.”

Despite the feminist sentiment, Ma’s choice of words can sometimes be a bit overly simplistic and stereotyping. He also seems to fall short when it comes to ageism. He recently raised eyebrows when he announced that Alibaba Group’s CEO, Jonathan Lu, would be replaced by the company’s younger COO, Daniel Zhang, as part of what he described as Alibaba’s desire to keep younger and fresher blood running its business.

MONEY Security

Why Your Smile Might Be Your Next Password

Online services and tech manufacturers are turning to biometrics for verification. You can use your hands, face — even your voice — to log in.

MONEY stocks

Why You Shouldn’t Reach to Grab New Stocks

150312_ISK_SkepticalInvestor
Taylor Callery

As Shake Shack's recent slide demonstrates, while the IPO boom gives you lots of hot companies to take a flier on, you’ll most likely fall flat.

Do you regret missing out on the stunning debuts of Alibaba ALIBABA GROUP HOLDING LTD BABA -1.96% and Shake Shack SHAKE SHACK INC SHAK -7.59% ? Are you now waiting to hail Uber or snap up Snapchat when they go public, as expected?

Before you jump in, remember that when you pick a stock, you’re already taking a leap of faith—but with a newly public company, you’re taking two leaps. First, do you really know enough about the business? Second, has the market had sufficient time to draw its own conclusions so that you are buying at a fairly rational price?

“Anything that’s been trading for a while has been vetted by a whole host of investors,” says John Barr, a manager with the Needham Funds. Not so at or just after an initial public offering, and that’s why you have to tread carefully.

You’ll pay for the honeymoon

IPOs attract big headlines on day one, but surprises inevitably crop up. From 1970 to 2012, the typical IPO gained just 0.7% in its second six months, after the honeymoon effect had a chance to wear off. That’s five percentage points less than other similar-size stocks, finds Jay Ritter, a finance professor at the University of Florida. The year after that, the average IPO lagged by eight points.

Chinese e-tailer Alibaba, which soared 38% on its first day in September, is getting its dose of reality a bit ahead of schedule. Shares are down 28% lately, after the company surprisingly missed revenue-growth forecasts.

Themes get overdone

It’s easy to be lured by a story. Shake Shack doubled on its first day, thanks to the buzz surrounding high-quality fast-food chains like Chipotle CHIPOTLE MEXICAN GRILL INC. CMG 1.71% . But riding a food trend is hard. A decade ago, overexpansion killed investors’ ravenous appetite for Krispy Kreme doughnuts KRISPY KREME KKD 0.16% , and the company’s shares remain 56% off their peak.

Shake Shack has also entered a crowded battle for foodie dollars: the Habit Restaurants HABIT RESTAURANTS HABT -3.96% , Potbelly POTBELLY CORP COM USD0.01 PBPB -0.72% , and Noodles & Co. NOODLES & CO COM USD0.01 CL'A' NDLS 0.53% all went public recently, and all more than doubled in the first day. Odds are the market is overoptimistic about most of them. Since 2013, 15 stocks have doubled on day one; only two—both biotech firms—are trading above their first day’s close.

The fact is, unless you gain access to an IPO at a great price at issuance, you can’t view those stocks as buy-and-hold investments. And you should avoid any richly priced new stock altogether.

Shake Shack trades at 650 times its earnings. To justify that valuation, Ritter figures the burger chain must grow from 63 stores to nearly 700, each half as profitable as a Chipotle restaurant. That’s a big leap indeed, given that Shake Shack locations aren’t even a third as profitable at the moment.

This story was originally published in the April issue of MONEY magazine. Subscribe here.

TIME Innovation

China’s Alibaba Is Beating Amazon to the Drone-Delivery Punch

Watch Alibaba drones deliver tea to Chinese customers

Chinese mega e-tailer Alibaba is testing the use of delivery drones to deliver shipments to hundreds of customers in Beijing and other cities, Bloomberg reports. The technology is demonstrated in Alibaba’s video above.

Amazon has long said it wants to experiment with similar drone deliveries here in the United States. However, it has yet to receive federal regulators’ blessings to do so. While advocates of small drones say they could boost innovation across fields from delivery to agriculture, some are concerned that having too many drones zipping around the skies could pose a safety risk.

TIME Companies

Fake Goods Land Alibaba in Hot Water With Regulators

But it might be an excuse for China’s largest e-commerce company to clean itself up, for regulators but more importantly, Wall Street

During Alibaba’s earnings call this morning, when it reported revenues that missed expectations, only one question came up about the report released yesterday by a Chinese regulator criticizing the e-commerce giant. But that might understate how likely the report is to influence talk about Alibaba for some time.

The regulator, the State Administration For Industry And Commerce (SAIC) accused Alibaba of selling fake goods and misleading customers on its biggest shopping platform Taobao.com.

SAIC has already taken down the report, but in it Alibaba’s consumer-to-consumer platform Taobao ranked worse for fakes and reliability than other Chinese sites like JD.com and Yihaodian.com. One fair reason for that, from Alibaba’s perspective, is that Taobao is much bigger than its rivals, with 500 million consumer accounts. But the report also includes allegations that Alibaba employees accepted bribes from merchants who wanted to improve their search rankings. Those allegations are going to be riling Wall Street for a while.

Taobao’s history of fakes and ripoffs is well known in China. But that hasn’t hurt Alibaba because increasingly, shoppers look to comments sections first while scanning similar products. If the seller isn’t well reviewed, they simply move on, similar to the way a low feedback score on eBay.com can doom a seller.

In that way, it’s tough to understand the timing of SAIC’s report, which was held until after the firm’s September IPO, the government said. Even if Alibaba isn’t pushing forward with solutions fast enough for regulators’ liking, CEO Jack Ma and Co. would certainly move fast if customers were turned off. But that’s the thing: customers are only growing. In today’s earnings report, Alibaba said revenues in the quarter grew by 40%, even if they slightly missed estimates.

As Paul Mozur of the New York Times notes, Alibaba’s success has brought it greater scrutiny “with China’s opaque and at-times arbitrary government regulators, a reminder that an investment in Alibaba brings inevitable political risk.”

Fortune highlighted those regulators in a piece last yearabout the scrutiny Western companies have come under. In it, foreign business groups accused China’s regulators of having a spotty record of openness and fairness. Now Alibaba has joined the criticism. On Taobao.com, it said the SAIC’s main investigator, Director Liu Hongliang, had unfairly formed the report, including the tiny sample size used (92 batches of products).

“We felt we were unfairly attacked by a report that was a sample check of some of the items,” Alibaba vice chairman Joe Tsai said in an interview this morning on CBNC. “We thought the methodology was flawed, we felt the attack was targeted at us specifically, and it was unfair. Over time we hope to work with regulators to address the issues of their concern.”

One response to the SAIC on Taobao, by an unsigned employee, included a fair point. As translated by the WSJ:

SAIC has “succeeded in proving just how unsafe and unreliable online shopping in China is, just how crafty the several millions of online retailers are, just how blind and stupid its 500 million consumers are….”

This article originally appeared on Fortune.

TIME Brands

Yahoo to Spin Off Alibaba Stake

Deal would let the Internet portal cash in on its stake while paying minimal taxes

Yahoo plans to spin-off its multi-billion dollar stake in Chinese e-commerce giant Alibaba into a separate company in an effort to cash in on its investment in the company tax-free.

The proposed transaction, which Mayer released today in conjunction with Yahoo’s fourth quarter earnings, will create an independent company called SpinCo. This publicly traded entity will absorb all of Yahoo’s 384 million Alibaba shares, worth $40 billion. Those shares will then be distributed to Yahoo’s investors.

The move comes amid pressure on Yahoo by activist shareholder Starboard Value to sell the Alibaba stake while paying minimal taxes.

When Alibaba went public last September, it marked the largest IPO of all time. Yahoo sold $9.4 billion worth of Alibaba shares in the IPO. Since then, Yahoo shareholders have argued that the company’s stake in Alibaba is worth more than Yahoo itself.

Since taking the CEO job over two years ago, Marissa Mayer has coasted on Yahoo’s fortuitous early investment in Alibaba. The company has returned $9.7 billion in proceeds from that investment through share repurchases. After this spin-off, that figure will total $50 billion. “This level of capital return is historic, especially for a company of our size,” Mayer said in a statement.

In the release, she touted the expertise of Yahoo’s tax lawyers in executing the complex transaction.

SpinCo will own a 15.4% stake in Alibaba.

This article originally appeared on Fortune.com.

TIME Markets

IPOs Raise $249 Billion in 2014 Amid Funding Frenzy

Dow Rises Over 400 Points Day After Fed Signals No Rise In Interest Rates
Andrew Burton—Getty Images A trader works on the floor of the New York Stock Exchange in New York City during the afternoon of Dec. 18, 2014.

Last year was a busy one for public offerings, even without Alibaba’s record-breaking listing

A company looking to raise money in 2014 didn’t have to look too far. Last year was the busiest for initial public offerings since 2010.

From Alibaba Group’s $25 billion IPO to much-hyped smaller listings, such as GoPro and Ally Financial, companies listing on the stock markets raised $249 billion worldwide, according to data collected by Thompson Reuters. Even without Alibaba’s record-breaking offering, last year was a standout period for IPOs.

IPOs picked up pace from 2013: about 40% more companies listed on public markets in 2014 compared to the year prior. They also raised more money. Leaving out Alibaba’s offering, which many agree is a once-in-a-generation kind of IPO, companies raised almost 36% more money year-over-year, according to the New York Times.

The booming market has led some analysts to speculate that it is inflated past realistic valuations, pumped up by overly optimistic investors. For instance, Lending Club’s December IPO valued the online lender at 35 times estimated revenue for 2017, which would put it on par with tech companies such as Facebook.

The public markets weren’t the only place to raise big bucks. The private market also saw big number sums, including Uber’s $1.8 billion fundraising round that valued it at $40 billion. Chinese smart phone maker Xiaomi and online home rental service Airbnb also raised huge sums that valued the startups at $10 billion or more.

Fundraising in both the public and private markets have been driven by a confluence of factors, including low interest rates that have pushed investors toward higher-growth opportunities and a skyrocketing stock market.

While no mega-IPO like Alibaba is set for the year ahead, there are some big-name companies that are scheduled to go public, including file-sharing startup Box and “fine casual” dining chain Shake Shack.

Other potential IPOs remain the subject of much speculation. Investors are watching startups such as Uber, Pinterest and Fitbit carefully, though none have yet indicated when or if they will list on public markets.

This article originally appeared on Fortune.com

TIME Wealth

Jack Ma Is the Richest Person in Asia

Alibaba CEO Jack Ma during an interview, in New York City on March 12, 2009.
Chip East—Reuters Alibaba CEO Jack Ma during an interview in New York City on March 12, 2009

There are no surprises here, really

Jack Ma is Asia’s wealthiest billionaire.

Ma, the founder of China’s e-commerce juggernaut Alibaba, as well as a runner-up for TIME’s Person of the Year, is worth $28.6 billion, according to Bloomberg Billionaires Index. The 50-year-old is worth about $300 million more than Hong Kong real-estate-and-ports tycoon Li Ka-shing, who had been Asia’s richest person since April 5, 2012.

About half of Ma’s fortune comes from his 6.3% stake of Alibaba. The Hangzhou-based company is larger than Amazon.com and worth about $259 billion.

[Bloomberg]

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