Chinese companies are increasingly looking to the Hong Kong Exchanges as the threat of delisting from the NYSE grows.
Amid growing tensions between the US and China, US regulators are more aggressively scrutinizing Chinese companies. More than 100 companies have been put on the 2020 Holding Foreign Companies Accountable Act (HFCAA) list, opening the door to their eventual removal from the NYSE if they fail to become compliant.
According to Business Insider, Kingsoft Cloud Holdings is the latest Chinese company looking to the Hong Kong Exchanges after being placed on the HFCAA list. The company, and others like it, see Hong Kong as a way to stay out of the US-China fray.
At the same time, moving to Hong Kong doesn’t automatically fix a company’s underlying issues. As Insider points out, Kingsoft has a number of challenges, including a tech crackdown by China, being reliant on too few large customers, and being a small player in the larger Chinese cloud market.
For companies with good financials and a solid business plan, however, Hong Kong may end up being the safe haven they’re looking for.
Howie Mandel says that ‘Deal or No Deal’ is risk versus reward, just like the New York Stock Exchange. He says the decision process is the same. “That’s ultimately what the stock exchange is about,” says Mandel. “How do you divvy up your portfolio? By the same token, when there is somebody sitting on our floor what do they do?”
Mandel rang the stock exchange bell this morning in honor of “Deal or No Deal” being revived on the popular financial network CNBC. Mandel is both the star and the producer of the show.
Howie Mandel, host and executive producer of CNBC’s ‘Deal or No Deal,’ discussed on CNBC how his show and investing on the New York Stock Exchange are very similar:
Deal or No Deal – It’s Risk Vs. Reward
It’s real. That’s why I’m so thrilled to be a small part of CNBC. When we first did it in 2005 there are books on investment that have quoted, talked about, and studied what Deal or No Deal is. It’s risk versus reward. That’s ultimately what the stock exchange is about. How do you divvy up your portfolio? By the same token, when there is somebody sitting on our floor what do they do?
How do you walk away? I said that Wednesday night. The guy said that on the first offer, “That’s half of what I make a year.” Would you invest half of your earnings in the stock market right now and go for it? Ultimately, there is no divine answer. What’s the big strategy on Deal or No Deal? What’s the big strategy on the New York Stock Exchange floor? Taking the big risk or playing it safe? It’s somewhere in between. But it’s also where you are in your life and what your needs are. With more risk, there is probably more reward, but can you afford to do that? What are you putting at stake for doing that?
So when people walk away, like the first episode that actually aired during Christmas, there was a young man who had a wife and a baby and he played it risking it. All the way to the end he risked it. Two cases were left of $5 and $750,000, and an offer of $350,000 was on the board. There was an opportunity to negotiate. He said, “No Deal” and went All In and walked out with just $5. How many people have done this on this New York Stock Exchange floor right here?
Trend with Media is to be Aware It’s Always Changing
The trend with media is to be aware that it’s always changing. Whether it’s with Netflix, or whether it’s with some other digital or Facebook, how people and different sectors of our population are ingesting and buying into this there is not one answer. There may be an answer right this minute. Right now people are binge-watching on Netflix. Next year it could be Facebook or YouTube or ten-minute bites. I think we have to be kind of fluid and open.
Twitter Inc., the company known for the micro-blogging/social networking free service Twitter (i.e. a 140 character per-status update (“tweet”) feed in which users can follow, send, and read) began trading on the New York Stock Exchange (NYSE) at 9:30 AM on Wednesday. Shares rose as high as $50.09.
This means that Twitter Inc. (TWTR) is now a public company, and upon launch, shares were priced at $26 a pop, initially valuing the company at $18.34 billion.
After its first day of trading yesterday, Twitter Inc.’s shares closed at $44.90, a 73 per cent increase from the initial IPO, giving the company’s worth at the end of the day to be $31 billion. Jack Dorsey, Evan Williams, and Biz Stone, Twitter’s creators, became instant billionaires after considerable returns. The one year estimated price per share is valued at $39.98, which means $39.98 (at this rate) may be the price-per-share as the year ends.
According to Dealogic, a markets service, Twitter has the second largest IPO by an American company, and trails shortly behind Facebook (FB) which shares, as of this time, cost $47.56.
As the next few days follow, Twitter will see an extraordinary amount of activity at the stock exchange, but will gradually fall down just a bit. If you’re hell-bent on buying shares, it may be wise to wait it out a little bit.
“In a few days after the IPO, you’re going to start seeing the stock price settling down a bit,” says Global X Funds CEO Bruno del Ama.
Thankfully as November 7th closed, Twitter’s NYSE debut didn’t result in any technical glitches like when Facebook went open to the public (and the Securities and Exchange Commission fined Nasdaq $10 million because of it) in May 2012. In late October, NYSE performed a successful test run that showed it could handle the volume of buyers when Twitter’s IPO launched.
So how does Twitter make money?
According to Will Oremus at Future Tense, Twitter makes it money “primarily by selling ads, which gain a lot of their value from the advertiser’s ability to target specific groups of users. Twitter’s disadvantage relative to Facebook is scale: It has on the order of 200 million users, while Facebook has some 1.15 billion. But its advantage lies in timeliness and topicality. People check Facebook casually, when time allows. Twitter users tend to use Twitter quite actively, and in conjunction with specific events, like TV shows, rallies, concerts, and breaking news. So advertisers can craft ads tailored not only to a Twitter user’s general tastes and demographic profile, but to what that user is doing at the very moment they see the ad.”
Actor Patrick Stewart joined Twitter Chief Executive Dick Costolo and founder Jack Dorsey at the New York Stock Exchange this morning, to ring in the social media platform’s IPO.
Twitter announced yesterday via tweet that the price per share of its initial public offering had been set at $26, with an $18 billion valuation. The shares had been priced above a previous range of $23 and $25.
Also on hand were 9-year-old lemonade stand owner Vivienne Harr, and a representative from the Boston Police Department. Harr established her “Make a Stand” movement, after seeing a photograph of two enslaved boys. She’d stood by her lemonade stand for 365 days, which ignited a crusade to end child slavery.
“I guess I represent the poster boy for Twitter,” Stewart said, adding that he’d only been tweeting for about a year and wasn’t buying any Twitter stock.
Stewart had been in the news of late after marrying longtime girlfriend Sunny Ozell, a singer-songwriter. The ceremony was officiated by Sir Ian McKellen, a close friend of the actor.
Twitter just announced via tweet that the price per share of its initial public offering has been set at $26, with an $18 billion valuation. The shares, which have been priced above a previous range of $23 and $25, will be available on the New York Stock Exchange Thursday morning.
The $26 IPO was debated by Twitter’s board of executives and underwriters until Wednesday afternoon, and is indicative of a high demand for the microblogging service’s stocks. Twitter raised $1.8 billion in the offering, selling 70 million shares.
Recently, Twitter had increased its IPO price range, which had the stock potentially sitting between the aforementioned $23 and $25. This came after an earlier estimate of shares possibly going for between $17 and $20.
Prior to this offering, there has been no public market for the common stock. It is currently estimated that the initial public offering price per share will be between $23.00 and $25.00. Our common stock has been approved for listing on the New York Stock Exchange under the symbol “TWTR”.
We are an “emerging growth company” as defined under the federal securities laws and, as such, may elect to comply with certain reduced public company reporting requirements for future filings.
Twitter users took to the platform, mostly concerned with the use of a low-resolution image to explain the IPO, which exceeded Twitter’s 140 character limit:
Oxley Act, and the listing standards of the New York Stock Exchange. We expect that the requirements of these rules and regulations will continue to increase our legal, accounting and financial compliance costs, make some activities more difficult, time consuming and costly, and place significant strain on our personnel, systems and resources.
The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that information required to be disclosed in reports under the Exchange Act is accumulated and communicated to our principal executive and financial officers. We are also continuing to improve our internal control over financial reporting. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight.
Our current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further, weaknesses in our disclosure controls or our internal control over financial reporting may be discovered in the future. Any failure to develop or maintain effective controls, or any difficulties encountered in their implementation or improvement, could harm our operating results or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods. Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of management evaluations and independent registered public accounting firm audits of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on the New York Stock Exchange.
In a different section, Twitter says:
We intend to apply for the listing of our common stock on the New York Stock Exchange under the symbol “TWTR”. However, we cannot assure you that an active trading market for our common stock will develop on that exchange or elsewhere or, if developed, that any market will be sustained. Accordingly, we cannot assure you of the likelihood that an active trading market for our common stock will develop or be maintained, the liquidity of any trading market, your ability to sell your shares of our common stock when desired or the prices that you may obtain for your shares.
After Twitter first revealed its intent to list under TWTR, some were confused by the ticker symbol of bankrupt Tweeter Home Entertainment, which saw it stock soar suddenly.
When Twitter goes public, it will be listed on the New York Stock Exchange. That’s the word from The Street, which cites sources close to the situation.
Twitter peer/rival Facebook listed on the NASDAQ, home of Google, Apple, Microsoft and Amazon, to name a few of the industry giants. Twitter, however, will be joining the likes of LinkedIn, Pandora and Demand Media on the NYSE, assuming the report is accurate.
The Street’s Chris Ciaccia writes, “The company may sell between 50 million and 55 million shares in the offering, with pricing between $28 and $30 per share, raising anywhere between $1.4 billion and $1.65 billion in the offering. That would value the company around $15 billion or $16 billion. The sources noted that nothing is concrete, and both the initial float and pricing are subject to change.”
Twitter announced on September 12th that it had filed confidentially for a planned IPO:
We’ve confidentially submitted an S-1 to the SEC for a planned IPO. This Tweet does not constitute an offer of any securities for sale.
Twitter filed for the IPO under the JOBS Act, according to the New York Times’ sources, which afforded Twitter with the aforementioned confidentiality, meaning it can go through its numbers outside of the scrutiny of the public eye.
Of course that hasn’t stopped (nor will it in the future) the media and analysts from digging in as deep as they can. Immediately after the news came out, Twitter’s use growth came into question. Twitter announced in December that it had just reached 200 million monthly active users, and CEO Dick Costolo is said to have told employees that he expects to double that by the end of the year. How that would happen, is unclear.
As previously reported, major stock trading has halted today thanks to Hurricane Sandy (aka: Frankenstorm). Fears related to the storm have shut down the New York Stock Exchange (NYSE) and NASDAQ. Both announced that they would be closed today, and may also be closed on Tuesday.
The New York Stock Exchange said in a statement, “We support the consensus of the markets and the regulatory community that the dangerous conditions developing as a result of Hurricane Sandy will make it extremely difficult to ensure the safety of our people and communities, and safety must be our first priority. We will work with the industry to determine the next steps in restoring trading as soon as the situation permits.”
NASDAQ also said over the weekend that its decision to close was made after consulting with other exchanges in the U.S. as well as government officials and regulators, such as the SEC.
The Securities and Exchange Commission (SEC) isn’t buying that Nasdaq’s much publicized computer glitch on the opening day of Facebook’s IPO was the root cause for all the confusion.
In fact, they have seen a couple other cases of so called, trading communication breakdowns coming from the NYSE, and now they want answers.
According to Nasdaq, they rewrote some computer code in an effort to jump start trading on the day of the IPO, and believe that is what could have led to the breakdown.
While the SEC is concerned that stock exchanges aren’t properly testing their equipment, they are also looking into whether the Nasdaq violated rules when it rewrote the code. More importantly, the agency’s enforcement unit has opened several cases to investigate the controls currently in place at all stock exchanges.
The SEC is also looking into whether some exchanges are giving preferable treatment to high-end customers and firms who repeatedly place large orders. Trust in the exchanges is an integral part of the system and regulators are working to make sure guiltiness are being enforced.
Early last week, Facebook filed documents with the courts hoping to consolidate investor lawsuits stemming from the IPO. They also blamed Nasdaq for a majority of the problems claiming their malfunction scared off investors and eroded demand.
So hopefully we’ll see some resolve to these investigations and lawsuits sometime soon. It’s only been a month since the IPO, but it seems like the list of headaches coming out of the event for everybody just keeps growing. It can’t be good for anyone’s business. We’ll keep you updated on all things Facebook.
Facebook stock closed at $31.99 per share yesterday, and some speculate that there truly is no limit on how low it can go. One of several factors that might’ve contributed to the sensational IPO’s less than stellar performance was an alleged technical problem at NASDAQ early on, which has prompted some investors to sue, and likewise drew the attention of the SEC and FINRA.
Now Facebook might consider listing with the New York Stock Exchange, in the wake of its embattled IPO, according to two sources familiar with the matter. These sources told CNBC that NYSE officials have been reaching out to Facebook concerning a possible switch. Though, NYSE states that no discussions have occurred, and that these dealings wouldn’t “be appropriate at this time” regardless. The anonymous sources added that Facebook is open to talks.
Nasdaq’s technical glitches have so far been one of the larger excuses for the problems experienced during initial FB trading, to where investors lost money because their buy, sell or cancellation orders weren’t going through. Nasdaq officials maintain that all order confirmations were filed at 1:50pm ET on the day of the IPO, though as of Tuesday, many investors still hadn’t received any order confirmations, which prompted all sorts of intrigue.
If Facebook were to decide to switch, David Wield, a former Nasdaq vice chairman, states, “It’s not hard (to switch listings), – Both firms (NYSE and Nasdaq) handle this sort of things all the time.”
It was reported today by the Wall Street Journal that Coca-Cola is considering buying energy drink maker Monster Beverage Corp. On news that Coca-Cola was looking into the acquisition, Monster’s stock went up 11% pushing Monster’s market value to $11 billion. If Coca-Cola pulled this off it would be the largest ever acquisition for the world largest beverage maker.
When asked about the possible purchase, a Monster spokesperson said, “it is the company’s policy not to comment on rumors.”
This is not the first time in the last few years that rumors have circulated regarding Coca-Cola’s acquisition of Monster, due to the fact that Coca-Cola distributes the energy drink.
The purchase of Monster by Coca-Cola would prove to be difficult because of the price tag attached. At $11 billion, any company in America would be hard pressed to come up with that kind of cash.
Update:
After trading for the day had ended, Coca-Cola was asked about a possible take over of Monster and this is what they had to say: “We are not in discussions to acquire the Monster Beverage Corporation.” They will consider a partnership but are not trying to acquire them.
Facebook is being valued between $75 billion and $100 billion and is planning to go public sometime in the next six months. In 2011 Facebook’s revenue grew to $3.8 billion. That means between 2009 and 2011 they grew 127% per year. Their IPO is much anticipated but there are some who believe that this will have very little impact on Facebook’s bottom line.
First off, Facebook only accounts for 1% of the world’s total of $507 billion in advertising expenditures. It is not expected that their going public will spur on any additional corporate spending in this area.
Secondly, Analysts feel that the value of the stock is grossly overinflated and may not hold its value after the IPO. This would only hurt Facebook’s bottom line.
Third, it is not expected that a Facebook IPO will encourage any new investment in other tech firms who are searching for startup capital. In other words, Facebook’s going public doesn’t give investors any new motives to believe other internet tech firms are any better of a risk than they were before.
A Fourth reason why Facebook’s IPO won’t have much overall impact is that it really doesn’t change much for FB’s insider’s. The cost of doing business may increase but, adding new investors won’t change how business is done. Facebook has been traded on private secondary markets by investors and employees for quite some time.
As of today, no decisions have been finalized about what platform (NASDAQ or NYSE) will even offer the stock. We’ll have to wait to see how going public ultimately effects Facebook.
No doubt the Initial Public Offering of Facebook stock is the most anticipated since Google went public. With equity-trading volume’s down for both platforms, the NASDAQ and the NYSE are in a battle to win the listing.
Securing Facebook could have a synergistic effect for the winner platform however it is doubtful that it will significantly change listing revenues at either exchange. According to insiders on Wall Street, Facebook could file IPO documents with regulators as soon as March. Sources also report that Facebook has already reserved their ticker symbol as “FB”.
CFO David Ebersman and other prominent members of Facebook’s staff have already heard from both exchange platforms on the merits of choosing one versus another but no decisions have yet been made. As their campaigns push forward I’m sure we’ll hear a decision from Facebook soon.
