Wednesday, June 28, 2017

Alibaba Increases Lazada Stake to $1 Billion

Chinese e-commerce giant Alibaba Group Holdings Ltd. recently announced raising its stake in e-commerce firm Lazada. The increase was said to be at 83% from 51%. An additional of $1 billion will be invested by Alibaba to the Lazada Group considering the latter’s Southeast Asian expansion.

Alibaba’s Double Investment
The recent move from the e-commerce giant marks a double investment in the firm after the former made the same deal with the same amount sometime in April a year ago. 

Lazada CEO Max Bittner told reporters, “That is quite a significant uptick and overall that reflects the great performance and traction that Lazada has seen. It also reflects that Alibaba continues to be extremely positive about this region, doubling down on Southeast Asia and seeing the potential. 

He further added that explosive growth has happened after the first investment of Alibaba to their company.

Lazada Expansion
At present, Lazada is serving only six countries in Southeast Asia by means of an online commerce platform. Last year, it had expanded upon acquiring Redmart and made its way into e-groceries. Before this year ends, the e-commerce firm is strategizing to enter the Southeast Asian markets. 

A 2016 report co-authored by Google forecast revealed that as the internet became widely accessible including the upward sales of smartphones e-commerce in Southeast Asia can grow to as much as $88 billion annually by year 2025. Back in 2015, the recorded sales was $5.5 billion. 

“The e-commerce markets in the region are still relatively untapped, and we see a very positive upward trajectory ahead of us. We will continue to put our resources to work in Southeast Asia through Lazada to capture these growth opportunities,” said Daniel Zhang (Alibaba Group CEO).

Compete with Rivals
Lazada was founded in 2012, and according to Alibaba’s annual report it has approximately 23 million annual active buyers as of March 31, 2017. 

CEO Max Bittner admits that the company is “suitably” funded to be able to participate even more in the market competition and be able to fight its rivals like Shopee. 

“Obviously this allows Alibaba to expand its global footprint, giving them unrivalled access to users. E-commerce penetration in Southeast Asia is only roughly 3 percent, so the partnership is a great step change,” Bittner stated. 

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Royal Philips Buys Spectranetics Corp. for 1.9 Billion Euros

Royal Philips, a Dutch health-technology company, announced on Wednesday that it is buying Spectranetics Corp., a U.S maker of devices to treat cardiac disease, for 1.9 billion euros, or 2.15 billion dollars, as the Dutch company strengthens its growing healthcare business.
Philips, an Amsterdam-based company, said that it would begin a tender offer to acquire all the issued and outstanding shares of Spectranetics for $38.50 a share, to be paid in cash upon the completion. The implied value of 1.9 billion euros is inclusive of Spectranetics’ cash and debt, and that is a 27% premium to the Spectranetics’closing price on Tuesday.

At the current share price, the buyback program represents a total of approximately 46.1 million shares. Philips plans to start the program in the third quarter of 2017, and complete it in two years. As the program will be initiated for capital reduction purposes, Philips intends to cancel all of the shares acquired under the program.

Healthcare is Philips’ largest business and it has been on the hunt for acquisitions to expand it. Philips spun off its lighting business last year as part of the shift to health.
The acquisition of Spectranetics is expected to further expand and strengthen Philip’s Image Guided Therapy Business Group.

“The transaction is expected to be revenue growth and profit accretive by 2018, given the projected revenue and productivity synergies,” said Philips CEO Frans van Houten.

The board of directors of Spectranetics has approved the transaction and recommends the offer to its shareholders.

“Our capital allocation policy aims for a balanced mix of investments in organic and inorganic growth opportunities, actions to drive balance sheet efficiency and returns to shareholders,” Houten added.

Upon completion of the transaction, Spectranetics and its more than 900 employees will become part of the Image-Guided Therapy Business Group within Philips.

Meanwhile, Spectranetics is known for using techniques including lasers and tiny drug-covered balloons to clean the insides of veins and arteries that have become clogged due to heart disease. The company also makes so-called image-guided therapy devices to treat cardiac and peripheral vascular disease. One product, laser atherectomy catheters, treat blockages with laser energy both coronary and peripheral arteries, Philip said.

Spectranetics’ highly competitive product range, integrated with our portfolio of Interventional Imaging Systems, devices, software and services will enable clinicians to decide, guide treat and confirm the appropriate cardiac and peripheral vascular treatment to deliver enhanced care for patients with better outcomes, as well as significantly boost recurring revenue streams for Philips.”

The combined Spectranetics and Philips Image Guided Therapy Devices business within Image-Guided Therapy Business Group, is expected to grow to approximately 1 billion euros by 2020.

Spectranetics is growing at a double-digit percentage rate and forecasts sales this year of $293 million to $306 million, according to Philips.

However, Philips shares closed at 32.54 euros each in Amsterdam Tuesday after declining around 0.79% on the session and trimming the year-yo-date gain just over 12.2%.

By 4:59 GMT-4, Spectranetics Corp. traded 1.30%, or 0.40, to $30.40. It opened in $30.80, with a session high of $30.95, and a session low of $30.10. Its market capitalization was $.33 billion.

By 10:05 GMT+2, Koninklijke Philips NV traded 0.83%, or 0.27, to 32.27 euros. It opened in 32.34 euros, with a session high of 32.46 euros, and a session low of 32.06 euros. Its market capitalization was 30.36 billion euros, its P/E ratio was 25.32, and its dividend yield was 2.48%.

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Tuesday, June 27, 2017

Apple and Hertz Partnership for Self-Driving Car Fleet Testing

Apple Inc. is partnering with Hertz Global Holdings Inc. to test its self-driving auto technology in six of the car rental company’s automobiles, according to a report. The news report was published Monday based on California Department of Motor Vehicle documents. This agreement echoes a larger deal between competitors Alphabet Inc. and Avis Budget Group Inc.
Hertz shares increased the most in nearly two years.
The news comes not long after Tim Cook, Apple CEO, told reporters that the company was focusing on “autonomous systems” rather than its original plan for an entire self-driving car.

“We sort of see it as the mother of all AI projects- it’s probably one of the most difficult AI projects actually to work on,” Tim Cook said in an interview.

It also comes just hours after the announcement, on Monday, that Avis Budget Group Inc., Hertz competitor, formed a partnership with Alphabet Inc.’s autonomous vehicle division, Waymo. The Avis-Waymo deal will take the form of Avis servicing 600 of Waymo’s self-driving cars in Phoenix, Arizona.

The iPhone maker is renting Lexus RX450h sport-utility vehicles from Hertz’s Donlenfleet- management unit, according to recently released documents. When Apple received its license to test three autonomous vehicles from the state’s DMV in April, the documents listed Donlen as the lessor and Apple as the lessee. Presumably, this partnership is a way for Hertz to test self-driving vehicle technology rather than letting its customers actually rent self-driving cars at this point in time.

A half- dozen vehicles have been testing Apple’s autonomous technology on public roads in and around the San Francisco Bay Area at least a year. The intentions of Apple’s move into driverless car technology, codenamed Project Titan, changed last year when the company stopped working on its own car to develop self-driving AI that could be fitted into other vehicles.
Meanwhile, Hertz stock slumped by more than 75% over the past 12 months in the middle of falling revenue and profit, and investor concern about the role rental companies will play in an automotive industry where self-driving cars and ride-hailing play a greater role. The shares trimmed some of those losses after Alphabet’s Waymo unit tapped Avis to manage its fleet of autonomous vehicles in Phoenix.

According to a report, Hertz shares increased 12.5% to $10.70 on a news Monday morning and were trading in the high-single-digit percentages before the report at 2:24 PM ET. Within three minutes, Hertz shares jumped 17.8% to $11.27, the biggest rise since July 2015. And as of 3:30 PM ET, the stock was trading just below $11.
On one hand, Avis did not move significantly right after the Hertz-Apple news, but had gradually climbed to $27.53 as of 3:30 PM ET.

When asked whether Apple wanted to build its own car in the future, Mr. declined and said, “We’re not really saying from a product point of view what we will do.”
However, Apple Inc. traded 0.31%, or 0.46, to $145.82, by 4:25 AM GMT-4. It opened in $147.17, with a session high of $148.28, and a session low of $145.38. Its market capitalization was $763.68 billion, its P/E ratio was 17.06, and its dividend yield was 1.73%.

However, Hertz Global Holdings traded 13.52%, or 1.29, to $10.83, by 4:30 AM GMT-4. It opened in $9.50, with a session high of $11.27, and a session low of $9.26. Its market capitalization was $798.61 million.

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Monday, June 26, 2017

Is Tesla About to Stream Music?

Reports last week said that Elon Musk had spoken to major music labels with regard to licensing music service for Tesla’s cars. The company did not refute the idea that music streaming is part of their upcoming goals.

Is Tesla into developing its own streaming music service?
News came out last week that Tesla will get involved with music streaming service and the hype went on building up since anything that pertains to Elon Musk, both the market and the media reacts strongly.

Exciting announcements in terms of music selection
During an investor Q&A session earlier this month, Musk toyed at the idea and even stated, “I do listen to music, particularly in the car. In terms of the music selection, I think there are going to be some exciting announcements in terms of the music selection. I think it’s very hard to find good playlists or good matching algorithms. We have something that works OK right now, but I think it could work really, really great. Yeah, there will be an announcement on that later this year. I think it’s going to be – this is going to be like the music you want to listen to.”

After a few days, Musk even tweeted via @elonmusk, “Try the new Tesla DJ station on streaming radio.”

Maximum happiness for Tesla customers
Tesla did not reject the idea that it is really getting ready for something surprising. A Tesla spokesperson even asserted, “We believe it’s important to have an exceptional in-car experience so our customers can listen to the music they want from whatever source they choose. Our goal is to simply achieve maximum happiness for our customers.”

Tesla’s potential audience
It is known that Musk has several whimsical ideas like a network of tunnels to alleviate traffic, high-speed hyperloop transportation and even colonizing planet Mars, however, analysts are considering a whole different perspective this time where they have compared Spotify AB (largest global streaming service) to the idea of Musk where the former is experiencing a mounting net losses due to over-the-top costs of song royalties where even having 50 million subscribers cannot answer for the escalating losses.

From the launching of Tesla’s Model S, the company has sold just more than 200,000 cars, yet it has a goal of producing 500,000 units annually before the year 2018 ends. But as analysts try to figure out a more sensible setup, and that is Tesla collaborating with Spotify or even Apple Inc or maybe acquiring Sirius XM Holdings Inc. or Pandora Media Inc.

Even so, it is still indistinct if the music service would be open to all or limited to Tesla owners or accessible only in their cars. Nonetheless, all music streaming services are aiming for a huge customer base in a wide range of platforms as probable.
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Third Point Takes $3.4 billion in Nestle’s Stake

Third Point LLC, a New York-based hedge fund founded by Daniel Loeb, has taken a $3.5 billion stake in Nestle SA, and urged the world’s largest packaged food company to find ways to increase its growth, buy back stock and  shed non-core businesses.
Mr. Loeb’s hedge fund has taken an investment position of roughly 40 million shares or 1.3%, in the company, and has begun productive conversations with management, the U.S-based fund said on Sunday. The stake is one of the largest investments taken by the hedge fund, which pressed for the change in recent years at U.S. internet firm Yahoo and Japan’s  Sony Corp.

Third Point shares in Nestle would make it the company’s eighth-largest shareholder behind the likes of BlackRock, Norges Bank and Capital World Investors, according to Thompson Reuters data.

Third Point revealed its Nestle position in a letter to investors, in which it argued the food company should sell its 23% stake in French cosmetics firm L’Oreal SA, which was worth about $27 billion and sell off nonessential operations as part of a broad shake-up.

L’Oreal shares rose 2.8%.

On the other hand, Nestle, whose products include baby milk, pet food, Nespresso coffee and KitKat chocolate bars, is under pressure to boost profitability as the global food industry is reacting to pressures unleashed by Kraft Heinz’s failed $143 billion takeover approach this year to Anglo-Dutch group Unilever.
Netsle’s shares jumped as much as 4.7% earlier today, touching a record high as investors wait for change.

“Despite having arguably the best positioned portfolio in the consumer packaged goods industry, Nestle’s shares have significantly outperformed most of their U.S. and European consumer staples peers on a three year, five year and ten year total shareholder return basis,” the fund said in a statement.

Nestle is the biggest player in a packaged food industry struggling with a slowdown in emerging markets, falling prices in developed markets and consumers demanding fresher, healthier products.

Third Point is proposing Nestle to set a formal profit margin target of 18-20 percent by 2020. Nestle’s current operating margin is about 15%.

“We feel strongly that in order to succeed, Dr. Schneider (Nestle’s current CEO) will need to articulate a decisive and bold action plan that addresses the said culture and tendency towards incrementalism that has typified the company’s prior leadership and resulted in its long-term underperformance,” Third Point wrote in a letter.

Third Point is known for agitating for change at public companies. Mr. Loeb played a big role in shaking up internet technology company Yahoo Inc. as an activist shareholder and board member some years ago.

Jan Bennink, Dutch food industry veteran, is advising Third Point on its Nestle investment and has also invested personally alongside the fund, Third Point said. Bennink ran baby food maker Royal Numico when Danone purchased it for 16.8 billion in 2007, oversaw the break-up of Sarah Lee and ran its coffee business, which is now owned by JAB Holding.

Earlier this month, Nestle said it might sell its $900 million-a-year U.S confectionery business in its latest effort to improve the health profile of its spreading portfolio. Analysts also guess that it could sell its U.S frozen food business.

Meanwhile, Nestle SA traded 3.84%, or 3.15, to CHF 85.25, by 11:58AM GMT+2. It opened in CHF 85.5, with a session high of CHF 86, and a session low of CHF 84.90. Its market capitalization was 265.31 billion, with a P/E ratio of 30.95 and a dividend yield of 2.70%.
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Friday, June 23, 2017

Ford Takes Responsibility over 15,600 Fire-risk Cars

Ford Motor Co is recalling almost 16,000 units of Ikon and Figo because of a fire risk possibility. The models are located in South Africa and were built between 2004 and 2012 in India.

From Leak to Flames
“A power steering fluid leak could result in fumes being emitted from the engine compartment. It may also be possible for power steering fluid to come into contact with the vehicle’s exhaust system components, creating the potential for smoke and, in extreme cases, fire,” the company said. 

Investigations disclosed that the fires were due to overheating due to cracked engine cylinder heads and oil leakage.

Vehicles Catching Fire
Also, this year, Ford South Africa recalled 4,500 units of Kuga SUV after reports that the vehicles were caught on fire. The automaker would rectify faulty steering hose. The identified units with damage were made at Ford’s Chennai plant (in India) back in the year 2004 to 2012.  

Related to the incident, Ford would voluntarily inspect almost 40,000 Ford Fiesta Classic and Ford Figo vehicles for possible concerns related to the cars steering hose.

Ford Taking Responsibility
Through its dealers, the company will replace the steering hose of all affected vehicles. Ford guaranteed that there would be no charge for the replacement and labor costs. The Detroit-based company is committed to producing first-class and outstanding quality vehicles to its customers and recalling its units is part of its professional and steadfast relationship with its clients. 

Back in 2013, Ford India also recalled a number of Figo and Fiesta Classic models to resolve faulty rear twist beam including the power steering hose. In November 2015, the automaker recalled, too, 16,444 units of compact SUV Ecosport in India to repair a part of the vehicles suspension known as the rear twist beam bolt. 

Also, last year, around 42,300 units of the new generation hatchback Figo and compact sedan Figo Aspire were recalled to correct a software glitch that might lead to untoward incidents such as airbags malfunctioning during an accident or a collision. 

Ford also plans to install a sensor to warn the driver when the coolant level falls. 

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