Didi Chuxing, China’s largest ride-hailing company, may be about to get into bicycles. Bike sharing, to be precise. The company, which is in the process of finalizing its acquisition of Uber’s business unit in China, today revealed that it has invested in a young startup called Ofo which lets people borrow bikes.
The investment is said to be “tens of millions” in size, but it isn’t clear how much equity Didi has picked up. Ofo reportedly raised $4 million in investment earlier this month, Didi didn’t specific whether its capital was part of that round or extra to it.
The Chinese firms didn’t say a whole lot actually — as evidenced by Didi’s one paragraph announcement — but they did call the deal part of “a multi-layered partnership.” Didi didn’t respond to our request for further information about what that actually means, and how it plans to work with Ofo.
Reading between the lines, though, the tie-up could give Didi an opportunity to make a foray into cycles, perhaps by providing Ofo as an option inside its app. Beyond offering licensed and private taxi rides, Didi’s services also include chauffeurs, test drives, and a communal bus service. Likewise, if it decides to move into services as Uber and others have done, then an army of students on bicycles could power food deliveries, couriering packages, etc across cities.
Ofo was founded two years ago as part of a startup program at Peking University. It claims to have 70,000 bikes across 20 cities in China, with its 1.5 million registered users taking 500,000 rides per day. Bicycles are hugely popular in China — Beijing alone has nine million, which inspired a pop song — and they are particularly well used by students in the country.
Didi’s other investments follow more obvious strategic lines. In the past, it has put money into Uber rivals Lyft (U.S.), Ola (India) and Grab (Southeast Asia) as part of an alliance of solidarity that includes the sharing of ‘best practices’ and allows customers to roam between different ride-hailing providers as they travel. However, Didi’s acquisition of Uber China threw that alliance into uncertainty since that deal will see the Chinese company become an investor in Uber, while Uber, in turn, will take equity in Didi.
IHG has outperformed peers YTD (in USD) and now trades in line despite its weaker RevPAR / system growth. Meanwhile, multiple signals are flashing that the US hotel cycle is peaking. We cut RevPAR forecasts, partly offset by an assumed $500m buyback, but IHG looks fully valued so we move UW.
Selon deux chercheurs suisses, les déodorants composés de sels d’aluminium favoriseraient le développement de cellules malignes et seraient à l’origine de cancers du sein.
Dans le doute, mieux vaut éviter les déodorants aux sels d'aluminium. C'est en substance la recommandation de deux chercheurs suisses, le professeur André-Pascal Sappino et le docteur Stefano Mandriota. Ils ont réalisé des expériences dans lesquelles les cobayes - des souris- développent des tumeurs lorsqu'ils sont aspergés de ces produits, utilisés quotidiennement par des millions de personnes .
Dans une étude publiée dans l'« International Journal of Cancer », ils tentent d'éclairer un débat sans réponse, puisqu'il n'existerait aucune preuve établie de toxicité directe de l'aluminium pour le corps humain.
En 2009, les deux chercheurs entament leurs recherches, interpellés par la hausse des cancers du sein ces cinquante dernières années chez des femmes plus jeunes, mais aussi par leur localisation : « Les tumeurs apparaissent désormais à 80% dans le cadran supérieur externe », confie au Parisien l'oncologue Sappino. C'est à dire, à côté du creux de l'aisselle, dont « l'épiderme est extrêmement perméable. Et c'est là que se trouve le réseau lymphatique qui draine la glande mammaire ».
Bruxelles refuse de réglementer par manque de preuves
En 2012, le cancérologue et le biologiste publient leur première étude. Ils prouvent que l'aluminium « perturbe » en quelques semaines « le comportement » des cellules mammaires humaines normales et « leur fait prendre les caractéristiques de cellules malignes ». En effet, les cellules ne cessent de se multiplier. Mais parce que l'expérience a été réalisée in vitro, elle a suscité une vague de scepticisme.
Estimant que les risques étaient impossibles à évaluer, la Commission de Bruxelles a refusé, en 2014, de toucher à la réglementation à laquelle sont soumis les industriels.
Dans leur dernière expérimentation, des cellules mammaires de souris ont été mises en contact, in vitro toujours, avec des sels d'aluminium - à des taux « 1 000 à 100 000 fois inférieurs à ceux présents dans un déodorant », ont précisé les chercheurs au Parisien.
Puis, ces cellules ont été injectées à des souris saines, dont le système immunitaire est plus ou moins réactif. Toutes ont développé des tumeurs, à des degrés divers certes, mais dont certaines ont été très « agressives » formant « des métastases », relate le Parisien. « Devant l'accumulation des indices à charge », et échaudés par le précédent « de l'amiante, où l'on a dû attendre cinquante ans pour affirmer sa toxicité, la sagesse voudrait, affirment-ils, que l'on évite l'emploi de ces antitranspirants ».
What price for Twitter? A lot, which might be a big issue for many buyers.
Could it fetch up to $30 billion, as some sources suggest?
As a fiduciary duty, the board of Twitter must consider the options and is doing so, although informally. And possible buyers also have to check in, largely because Twitter is one of the few interesting and impactful digital platforms around. It might be limping, but it’s not lame (see Yahoo for that). And its mass of data, advertising potential, mobile video opportunity and real-time news capabilities make it a must-look.
Last week, Recode posted an extensive list of possible buyers of Twitter and the reasons pro and con, since the noise around the company’s possible sale has gotten so deafening.
Our argument was that Twitter was clearly prepping for a possible sale, despite all their protestations to the contrary, because it has not been able to grow independently and its persistent tinkering with its product has not worked. Simply put, a slowing advertising base and stalled user growth means that serious sale options need to be considered.
Today, the cacophony was upped dramatically when CNBC’s David Faber, who is the most expert of banker whisperers, reported that the sale discussions had indeed escalated with board buy-in and that Salesforce and Google were among the potential bidders.
This board direction has been clear for a while, with co-founder Evan Williams even indicating that publicly recently that directors were considering all options. And both Google and Salesforce were on our list too, along with Apple, Microsoft, Facebook, big media (Disney, News Corp/Fox), big pipes (Comcast, Verizon) and private equity. Every one of the buyers had great — though different —reasons for doing so, even if there is a lot of hair on every single possible purchase.
One company we left off was Snapchat, which is an intriguing concept, since it would marry a communications hotshot with a unique broadcast platform. Snapchat CEO Evan Spiegel and Twitter CEO Jack Dorsey have known each other for a long time and were once close, although Snapchat has not yet made any splashy acquisitions, and certainly none that would come even close to Twitter’s price tag.
IBM was left off, too, but could be intriguing thanks to its focus on major data efforts.
But for how much? While we estimated an $18 billion price tag based on the recent sale of LinkedIn to Microsoft, two sources said Twitter was looking for much more to sell. The number? At least $30 billion.
Yikes. That could knock Salesforce out, although it made a serious run at LinkedIn which went for $26 billion a few months back. (That said Salesforce’s market cap is just under $50 billion, lower today by 5 percent due to the Twitter rumors, meaning Wall Street no likey).
In contrast, Google has plenty of money to spare, even if it does not have the desire to buy all that regulatory and trolling trouble. It’s also not clear how interested Alphabet CEO Larry Page is in the idea.
Still, the Google buy seems the most likely, given how much both sides would benefit. As Kurt wrote: “There’s a good reason Google’s name always tops this list: It makes the most sense! Google has the money — Alphabet generated more revenue last quarter alone ($21 billion) than Twitter is actually worth. And while the company has tried its hand at social media before (I think we can all now agree that Google+ has been a minus), Twitter would give it a legitimate social platform to tie in with YouTube, which is now feeling heat from Facebook and Snapchat, which are very social. Could Google make good use of Twitter properties like Vine and Periscope by coupling them in some kind of media hybrid offering with YouTube? Maybe!”
Remember, Google also kicked the tires on LinkedIn before its sale to Microsoft. So maybe there’s more appetite for a social play than we once thought.
But good ideas do not acquisitions make, and Twitter is the digital equivalent of a jewel wrapped in a very gnarly hairball. As one former exec there told us recently: "Twitter is the most invaluable company that no one really wants to buy."
That’s not true. At this point, the question is when and how. If it suffers another weak quarter, as most expect it to, a sale seems inevitable.
Preparing for another unwind
So far in 2016, many of our investors, particularly amongst the hedge fund community, have expressed that 2016 has been a difficult year to produce consistent alpha. We believe the elevated volatility of factor returns contributed to the underperformance. We noted several times already in 2016 that volatility of our factors has elevated. That said, we have observed recently that elevated factor volatility appears to be on the decline. Exhibit 1 shows the average rolling 3-month daily volatility of value factors (average of Next-12M P/E, Actual P/E, Actual P/B, FY1 Price/CF, and FY1 Dividend yield return volatility), and price-return momentum factors (3M, 6M and 12M). The volatility of value factor has hit its highest level this month (Sept 2016) since 2011.
In March 2011, the volatility of factor returns jumped due to the Tohoku earthquake. The volatility of momentum factors are at their highest since 2010. The volatility of momentum factors tend to high by nature, but the recent rise has been significant compared to the historical average of 0.5% (2012 to 2014) vs 1.1% in September 2016. With that effect, our simulated Japanese equity long/short strategy also
had one of the worst monthly performances in August (-2.9% mom, vs +0.7% on average) shown in exhibit 2. We also observed that the rising volatility since 2H 2015 coincided with significant net out flow of foreign investors from Japan. Exhibit 3 shows weekly and cumulative net purchases/sales of foreign investors in the Japanese equity market. From August to October 2015, cumulative net selling by foreign investors reached 4tn JPY. Similarly, from January to March 2016, the cumulative net selling amount by foreign investors totaled 5tn JPY. Since then, foreign investor flow has been relatively low.
However we observed a significant rise in the factor volatility again in July and August. This could also be flow related, not directly in and out of Japanese equity, but flow out from a specific strategy. Accordingly to eVestment’s July 2016 Hedge Fund Asset Flows Report, it is estimated that US$25.2billion was removed from hedge funds in July, and the net negative flow of US55.9 billion 2016 YTD. We believe flow continues to be an important factor in 2016, and believe we could see another period of high factor volatility related to unwinding of strategies. We therefore update our simulated Japanese equity long/short hedge fund portfolio4 in exhibits 5-8, to better understand where potential crowding could be at stock the level. We also recommend monitoring factor exposure closely from a portfolio risk management perspective, and not having exposure to certain factors such as value and momentum for too long. As such, we think the recent decline in the factor volatility could be the calm before a potential storm.
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Verizon executives are said to be at war over how to proceed with the company’s $4.8 billion deal to acquire Yahoo, in light of last week’s announcementthat the Web pioneer was the victim of a massive 2014 hack, sources told The Post.
The New York company’s brass are mad that Yahoo didn’t notify them sooner of the hack, which exposed information on some 500 million users.
It is unclear when Yahoo knew of the problem, although several reports said Yahoo Chief Executive Marissa Mayer knew in July, before Verizon won the bidding contest.
At the same time, US regulators are looking into the matter, sources said,
Verizon didn’t learn of the hack until last Tuesday, just a few days before it announced the hack to the world, sources said.
“Verizon is livid they were not informed during due diligence and infighting … is impacting the Yahoo deal and this could be the escape clause,” said a source close to both parties.
Media and tech bankers are already whispering that Verizon wants to get out of the Yahoo deal — and if they do they may pursue Twitter, which is now in play, sources said.
“I would expect a price renegotiation at a minimum,” said one source.
Some experts said it would be hard for Verizon to prove the hacking was a material adverse change — the one surefire legal gambit that could scuttle the deal.
Yahoo would have to pay some $145 million if the deal somehow falls apart and it is to blame. While the hack is “upsetting,” it isn’t clear “it is a material adverse change,” one big Yahoo shareholder told The Post.
“Worst case, Yahoo retains the liability for the settlement.”
Reps for Verizon and Yahoo did not respond for comment.