Mega-IPO to rekindle the ‘bromance’ behind Alibaba’s rise (Reuters)
Masayoshi Son’s nose for an investment has turned a $20 million start-up punt on Alibaba into a stake worth maybe $50 billion or more as the Chinese e-commerce giant co-founded and led by Jack Ma heads to what could be the biggest U.S. tech IPO of all time. Son, CEO of Japanese telecoms firm SoftBank Corp, also put money into a young Yahoo Inc, co-founded by Jerry Yang, in 1995, and Yahoo’s subsequent investment in Alibaba saw Ma, Son and Yang build Alibaba Group Holding Ltd [IPO-BABA.N] into one of world’s biggest internet companies as China’s e-commerce market took off. “It was the look in his eye, it was an ‘animal smell’,” said Son of his decision to back Ma when they first met in 2000. “It was the same when we invested in Yahoo … when they were still only 5-6 people. I invested based on my sense of smell,” he quipped in a group media interview in May. Under pressure from investors, Yang quit Yahoo in early 2012 and gave up his seat on Alibaba’s board. He is now a founding partner of AME Cloud Ventures, a San Francisco venture fund. But next month, the three poster boys for Asian technology entrepreneurship, bound by a shared ambition and a taste for sushi and golf, are set to be reunited on Alibaba’s board following the firm’s long-awaited New York IPO.
Plan to slow ‘Flash Boys’ already has some holes (NetNet)
The Securities and Exchange Commission announced the proposal Tuesday in which 1,200 small-cap firms will be divided into three equal-sized groups with different standards governing each. One group—the “control”—essentially would trade the same as before; the second would see stock prices quoted in 5-cent increments, as opposed to the penny increments currently used; and the third also would trade in 5-cent increments but also would follow a “trade-at” requirement in which trading centers couldn’t match prices unless they display the best bid or offer. Ostensibly, the program’s goal is to “enhance market quality for smaller capitalization stocks for the benefit of investors and issuers,” according to the SEC. More practically, the changes are aimed at thwarting high-frequency traders who have used the lightly traded small-caps to skim profits by getting lower prices on purchase and higher prices on sales than their slower competitors…Inside the market, the SEC’s effort got points for effort but still raised some worries. “What does concern me is there are a bunch of exceptions thrown in there, particularly on test group three,” said Joe Saluzzi, a partner in Themis Trading and outspoken advocate for trading reform. “There may be a need for some, but that to me smells a little bit like some interests are now being put into the rule.”
JPMorgan, Four Other Banks Hit by Hackers: U.S. Official (Bloomberg)
Computer hackers targeted JPMorgan Chase & Co. (JPM) and at least four other banks in a coordinated attack on major financial institutions this month, according to a U.S. official. The attack led to the theft of customer data that could be used to drain accounts, according to another person briefed by U.S. law enforcement. The two people, who asked not to be identified because the investigation is continuing, discussed the incident after Bloomberg News reported a breach on banks earlier today. Hackers targeted customer and employee information, said a third person involved in the investigation, who was also briefed by the government. The theft involved gigabytes of data, said several people familiar with the attacks. The scale indicates a potential for significant financial fraud. Most thefts of financial information involve retailers or personal computers of consumers. Stealing data from big banks is rare, because they have elaborate firewalls and security systems.
FBI Examining Whether Russia Is Tied to JPMorgan Hacking (Bloomberg)
The sophistication of the attack and technical indicators extracted from the banks’ computers provide some evidence of a government link. Still, the trail is muddy enough that investigators are considering the possibility that it’s cyber criminals from Russia or elsewhere in Eastern Europe. Other federal agencies, including the National Security Agency, are now aiding the investigation, a third person familiar with the probe said.
Square Said in Talks for Funding at $6 Billion Valuation (Bloomberg)
Square Inc., the mobile-payments startup co-founded by Twitter Inc. Chairman Jack Dorsey, is in talks to raise financing at a $6 billion valuation, according to a person with knowledge of the matter. The San Francisco-based company is seeking about $200 million, with some of the funding coming from the Government of Singapore Investment Corporation, said the person, who asked not to be identified because the matter is private. That would push Square’s valuation up from about $5 billion earlier this year.
Amish Beard-Cutting Convictions Reversed (WSJ)
A federal appeals court on Wednesday overturned the criminal convictions of 16 Amish men and women in a series of beard and hair cuttings, finding error in how the jury was instructed on determining whether a hate crime occurred. In a 2-to-1 ruling, the U.S. Court of Appeals for the Sixth Circuit reversed the convictions on federal hate-crime charges and returned the case to the lower court. A spokesman for Steven M. Dettelbach, U.S. Attorney for the northern district of Ohio, said his office disagrees with the ruling and is reviewing its options, which include appealing the ruling, retrying the cases or dismissing the charges. The case against members of the eastern Ohio community of Bergholz involved a series of attacks in which other Amish were physically restrained while their hair and beards were shorn. Prosecutors charged those involved under the federal hate-crime law because the Amish consider the length of their hair a sign of religious devotion and the cuttings were to enforce a particular view of the religion. A jury in September 2012 found the 16 defendants guilty of hate crimes, including Bishop Samuel Mullet Sr., who was sentenced later to 15 years. They all appealed the hate-crime conviction, but Wednesday’s ruling doesn’t affect the convictions of certain defendants on charges such as concealing evidence. Read more »