We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Alibaba (BABA) to Sell Bonds Up to $8B as Investor-Friendly Move
Read MoreHide Full Article
Reportedly, Alibaba Group Holding Ltd. (BABA - Free Report) is planning to raise as much as $8 billion from a bond offering this month.
It plans to raise at least $5 billion through this bond sale. Though no details about the offering have been revealed yet, reportedly, the deal will be offered in multi tranches with specific tenors.
The company plans to utilize the net proceeds from the transaction for general corporate purposes.
Cash Position
As of Sep 30, 2020, cash and short-term investments totaled RMB405.9 billion (US$60 billion), up from RMB381.6 billion on Jun 30, 2020.
Alibaba generated RMB54.3 billion (US$8 billion) cash from operations during the last reported quarter. It also generated free cash flow of RMB40.5 billion (US$6 billion) for the fiscal second quarter.
Moreover, debt to total capital of the company was 11.1% (lower than the industry average of 15.1%) as of Sep 30, 2020, which is good.
We believe that Alibaba has a strong balance sheet, which will help it to capitalize on investment opportunities and pursue strategic acquisitions, thereby further improving prospects.
Share Price Performance
Alibaba has returned 4.6% in the past year, underperforming the industry's 46.6% rally and S&P 500’s rise of 16.5%.
The share price trend clearly suggests that shareholders’ sentiments have been hugely hurt.
Reasons for the Decline
Recently, the company has been grappling with antitrust hassles and been facing intense scrutiny in China.
Last December, a probe was announced by China’s State Administration for Market Regulation to look into Alibaba’s unhealthy business practices. This investigation primarily focused on the company’s businesses dealing in e-commerce, logistics and social media.
Also, Alibaba’s fintech arm Ant Group’s planned initial public offering (IPO) was suspended, just two days before its shares were supposed to be traded. IPO was halted as financial regulators raised concerns over Ant’s suspicious micro-lending services.
These investigation and allegations have definitely been the reasons for the share price decline.
Long-term earnings growth for Alphabet, Etsy, and Inuvo is currently projected at 16.9%, 29.2% and 30%, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
Image: Bigstock
Alibaba (BABA) to Sell Bonds Up to $8B as Investor-Friendly Move
Reportedly, Alibaba Group Holding Ltd. (BABA - Free Report) is planning to raise as much as $8 billion from a bond offering this month.
It plans to raise at least $5 billion through this bond sale. Though no details about the offering have been revealed yet, reportedly, the deal will be offered in multi tranches with specific tenors.
The company plans to utilize the net proceeds from the transaction for general corporate purposes.
Cash Position
As of Sep 30, 2020, cash and short-term investments totaled RMB405.9 billion (US$60 billion), up from RMB381.6 billion on Jun 30, 2020.
Alibaba generated RMB54.3 billion (US$8 billion) cash from operations during the last reported quarter. It also generated free cash flow of RMB40.5 billion (US$6 billion) for the fiscal second quarter.
Moreover, debt to total capital of the company was 11.1% (lower than the industry average of 15.1%) as of Sep 30, 2020, which is good.
We believe that Alibaba has a strong balance sheet, which will help it to capitalize on investment opportunities and pursue strategic acquisitions, thereby further improving prospects.
Share Price Performance
Alibaba has returned 4.6% in the past year, underperforming the industry's 46.6% rally and S&P 500’s rise of 16.5%.
The share price trend clearly suggests that shareholders’ sentiments have been hugely hurt.
Reasons for the Decline
Recently, the company has been grappling with antitrust hassles and been facing intense scrutiny in China.
Last December, a probe was announced by China’s State Administration for Market Regulation to look into Alibaba’s unhealthy business practices. This investigation primarily focused on the company’s businesses dealing in e-commerce, logistics and social media.
Also, Alibaba’s fintech arm Ant Group’s planned initial public offering (IPO) was suspended, just two days before its shares were supposed to be traded. IPO was halted as financial regulators raised concerns over Ant’s suspicious micro-lending services.
These investigation and allegations have definitely been the reasons for the share price decline.
Zacks Rank and Stocks to Consider
Alibaba currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector include Alphabet (GOOGL - Free Report) , Etsy, Inc. (ETSY - Free Report) and Inuvo, Inc. (INUV - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Long-term earnings growth for Alphabet, Etsy, and Inuvo is currently projected at 16.9%, 29.2% and 30%, respectively.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>