NYSE sets Spotify reference price at $132

The New York Stock Exchange on Monday set the reference price for shares of music streaming service Spotify Technology SA at $132.

Spotify is pursuing an unusual direct listing to reach the public markets in place of an initial public offering, and shares are expected to start trading on Tuesday.

The reference price is not an offering price for the shares, nor is it the opening public price for shares of the Swedish technology company.

The opening public price will be determined by buy and sell orders collected by the NYSE from broker-dealers, the exchange said. Based on those orders, the opening price will be set based on a designated market maker’s determination of where buy orders can be matched with sell orders at a single price.

But the reference price will play a part in Spotify’s eventual pricing.

Though Spotify has not hired traditional underwriters - a move that will save it millions of dollars in fees - it has hired Citadel Securities as a market maker to set the opening price on the NYSE, with help from Morgan Stanley.

While their roles will be limited, the reference price will be used while building the order book. Early on Tuesday, Citadel and Morgan Stanley will analyze investors’ buy and sell orders and then set an opening price for the stock.

By –Reuters

Trump’s China Concern Adds Pressure in Race to Be First With 5G

The Trump administration’s concern about China’s growing technology clout is putting even more pressure on U.S. wireless carriers in their marketing battle over which company will be the first to offer 5G.

Verizon Communications Inc., AT&T Inc. T-Mobile US Inc. and Sprint Corp. are rushing to deliver fifth-generation wireless service that will perform as much as 100 times faster than 4G. At stake is the potential to grab market share in an industry where consumers are fiercely loyal to their carriers. And the companies need to upgrade their networks quickly so they can quash the idea that government should intervene to accelerate the process.

“The race is really about getting that 5G icon on the handset,” said Chetan Sharma, a wireless consultant. In the consumer’s mind, 5G is way better than 4G, he said. Verizon boosted its market share by 5 percentage points after it was the first to roll out 4G more than seven years ago.

While fully standardized coast-to-coast 5G networks are at least two years away, the carriers are pushing hard into technology development and waging a fierce marketing campaign through a barrage of press releases. Verizon knows the value of being first, which may explain why it’s issued three times as many announcements touting 5G than its smaller rivals.

Behind the marketing is billions of dollars in engineering. Carriers, software developers, chipmakers and phone manufacturers are spending about $200 billion a year in 5G research and deployment. The aim is to have a ubiquitous network that can run with lower latency, or lag time, in transferring data -- the type of super-fast connections that enable advances like robotic surgery and autonomous cars.

At the same time that carriers are fighting for consumer mind share, the threat from China has prompted the Trump administration to consider creating a nationalized 5G network to protect U.S. security. President Donald Trump has already killed Broadcom Ltd.’s proposed takeover of Qualcomm Inc. on concern that China would gain an edge in critical 5G technology.

The U.S. government is also trying to make it easier for American companies to compete with China. The Federal Communications Commission voted this month to ease environmental and historic reviews for companies installing some antennae for 5G service. AjitPai, the agency’s chairman, said the vote amounted to “concrete action that will help the United States lead the world in 5G.”

In addition, the FCC is moving to block some spending by carriers on gear from companies posing a national security threat -- an initiative that could strengthen barriers confronting Chinese equipment makers eager to sell in the U.S.

The consideration of a national 5G network drew strong opposition from industry officials and even Pai, who was named chairman by Trump. Opponents said private industry is better suited to advance the technology than the government. The White House said the plans were only in the early stages and that no decision has been made.

For its part, China has been encouraging development of 5G and has identified some airwave bands like 3.5 gigahertz for use as a possible global spectrum. That’s turned up the pressure on the U.S. to allocate more mid-band spectrum, said Mark Lowenstein, a mobile-industry consultant.

Verizon showed seven years ago that getting even a few months ahead of the pack can lead to significant market-share gains and years of bragging rights. Verizon’s lead in 4G LTE gave it a “decade-long perception of network superiority, which translated into probably one of the longest sustained periods of subscriber gains,” Sharma said.

Verizon launched 4G in December 2010. In the previous five years, the company’s average share of new subscribers was 36 percent. From 2010 to 2015, its average share of new users jumped 5 percentage points to 41 percent, partially due to the faster network, Sharma said.

Different Approaches

No carrier wants to be seen as the laggard. And yet at this point there’s no agreement on whether high or low frequencies are best for 5G. High frequencies carry more data but can’t travel far and are easily blocked by rain and foliage. To make high frequencies work, a network requires many more antennae in a smaller radius. Low-frequency airwaves don’t carry as much data but can travel greater distances and through walls. The four carriers are taking different approaches:

Verizon is using high-frequency airwaves to beam 5G broadband to homes, and starting mobile 5G service this year AT&T is also testing high-frequency airwaves, promising mobile 5G this year Sprint is using mid-band airwaves for nationwide mobile 5G in early 2019 T-Mobile is implementing multiple bands for mobile 5G this year And while each company will inevitably dispute any first-place claims by the others, consumers are going to be swayed mostly by speed.

“T-Mobile will probably use low frequency and be the first with 5G,” said Jennifer Fritzsche, an analyst with Wells Fargo & Co. “And if you combine that with the marketing power of that company, it will be a powerful mix.”

For now, while the 5G battle might be mainly about public perception, it’s still a race no one is willing to lose.

“Verizon is the furthest down the road in trialing,” said Michael Mahoney, senior managing director at Falcon Point Capital LLC, which invests in wireless companies. “And then AT&T. They are old hands at this game. They are also very conscious about not being burned by marketing.”


SoftBank, Alibaba to invest $445 million in India's Paytm E-Commerce

SoftBank Group is investing $400 million in India’s Paytm E-Commerce Pvt. Ltd. in a funding round that will value the online retailer at roughly $1.9 billion, a regulatory filing showed on Monday.

Alibaba, an existing investor in Paytm E-Commerce, is also putting in $45 million in the round, the filing showed.

SoftBank, which is among major investors in India’s fast-growing e-commerce sector and already owns a stake in Paytm’s parent, confirmed investing in Paytm Mall, the brand name under which Paytm E-Commerce operates an online market place.

“We believe Paytm Mall’s offline-to-online operating model, combined with the strength of the Paytm ecosystem, is uniquely positioned to enable India’s 15 million offline retail shops to participate in India’s e-commerce boom,” SoftBank said in a statement on Monday.

In a separate statement, Amit Sinha, chief operating officer of Paytm Mall said the company would deploy the latest investment from SoftBank and Alibaba to beef up its technology and build superior logistics among other things.

A filing with India’s Registrar of Companies showed SoftBank units will get a 21.1 percent stake in Paytm E-Commerce after the investment which would come in four tranches.

Alibaba.Com Singapore E-Commerce Pvt. Ltd, which currently owns 36.3 percent of the Indian e-retailer, will remain the single-largest shareholder of Paytm E-Commerce but with a relatively smaller stake of just over 30 percent after its latest investment is completed in four tranches.

Paytm E-Commerce competes with Amazon.com Inc’s Indian unit and home-grown Flipkart. A group company of Paytm’s parent One97 Communications Ltd runs India’s biggest digital wallet services and also has a stake in a payments bank.

SoftBank's Vision Fund took roughly a here of Flipkart last year for $2.5 billion.

The Japanese group is also one of the biggest investors here in another Indian e-tailer Snapdeal.

From – Reuters

Alibaba Takes Control of Ele.me, at $9.5 Billion Value

Alibaba Group Holding Ltd. is buying full control of the startup Ele.me as it steps up efforts to expand in China’s fast-growing market for local delivery of food and other services.

The deal implies an enterprise valuation of $9.5 billion for Ele.me, Alibaba said in a statement Monday, without saying how much it’s paying. Alibaba and affiliate Ant Small and Micro Financial Services Group Co. already owned about 43 percent of the startup’s voting shares. Alibaba paid all cash in the deal and has acquired all the shares formerly held by Baidu Inc., according to a person familiar with the matter.

Alibaba shares were down 2 percent to $179.88 at 10:17 a.m. in New York.

Ele.me -- which means “hungry yet?” -- operates an army of delivery people on motorbikes across the country and is vying for supremacy in the local services industry with MeituanDianping, a startup backed by Alibaba rival Tencent Holdings Ltd. The market is surging as people increasingly turn to their smartphones to order food, schedule beauty treatments and hire domestic helpers. It’s also strategically important for Alibaba and Tencent as a means to promote their respective payment services.

As one of the most frequently used applications, food delivery is the single most important entry point in the local services sector,” Daniel Zhang, chief executive officer of Alibaba Group, said in an internal email to staff Monday. “We can already see that a vast, multi-dimensional local instant delivery network formed through a food delivery service will be an essential piece of the commerce infrastructure.”

Bloomberg News reported in February on Alibaba’s plans to buy out other investors in Ele.me. In a sign of the heated market, Meituan has become one of the most valuable startups in the world. The company is seeking to go public as soon as this year at a valuation of at least $60 billion, people familiar with the matter said last month.

The Ele.me deal is part of a broader foray by China’s largest e-commerce company into logistics and brick-and-mortar assets. Alibaba is taking over longtime delivery affiliate Cainiao and putting money into warehouses. It has also made investments in traditional retailers, including department store chain Intime Retail Group Co. and China’s largest operator of Walmart-style hypermarkets.

"If the Ele.me distribution network is integrated with Cainiao it can become a more efficient asset and bring it to break-even quicker," said Kirk Boodry, an analyst with New Street Research.

Alibaba and Ant Financial were lagging behind Tencent and Meituan in terms of offline penetration, especially local services, said Counterpoint Research analyst Flora Tang.

“Ownership of Ele.me is the fastest and most effective way for Alibaba to regain leadership position in this area to compete with Tencent,” she said.

Baidu had ceded control of its own food-delivery unit to Ele.me last year as the startup and Meituan became the two biggest competitors in China’s online food-delivery market.

Zhang Xuhao, Ele.me’s founder, will become chairman of the company, while Wang Lei, vice president of Alibaba Group, will become chief executive officer of Ele.me, the company said.

Alibaba continues an expansion in e-commerce as it faces greater competition across Asia. Last month, the company said it would invest another $2 billion in Lazada Group SA to bolster its presence in Southeast Asia, where Amazon.com Inc. has launched in Singapore and Sea Ltd.’s Shopee is expanding to win consumers.

The Ele.me deal may cut into profit margins in the short term, but Alibaba has demonstrated a willingness to make such acquisitions for gains in the future. It acquired the video service YoukuTudou and mapping provider AutoNavi, for example.

"Whenever Alibaba have seen long-term upside they haven’t been hesitant about buying something in," said Boodry.

From – Bloomberg

Apple Working on Touchless Control and Curved iPhone Screen

Apple Inc. is working on touchless gesture control and curved screens for future iPhones, projects that may help the company differentiate its most-important product in an increasingly crowded market, according to people with knowledge of the matter.

The control feature would let iPhone users perform some tasks by moving their finger close to the screen without actually tapping it. The technology likely won’t be ready for consumers for at least two years, if Apple chooses to go forward with it, a person familiar with the work said.

Apple has long embraced new ways for humans to interact with computers. Co-Founder Steve Jobs popularized the mouse in the early 1980s. Apple’s latest iPhones have a feature called 3D Touch that responds differently depending on different finger pressures. The new gesture technology would take into account the proximity of a finger to the screen, the person said.

Apple is also developing iPhone displays that curve inward gradually from top to bottom, one of the people familiar with the situation said. That’s different than the latest Samsung smartphone screens, which curve down at the edges. So far, every iPhone model has used a flat display. The iPhone X’s OLED screen curves slightly at the bottom, but the shape is mostly invisible to the human eye.

OLED, or organic light emitting diode, displays can be shaped into curves or even folded, unlike the less-flexible LCD screen technology used in prior iPhones. A curved iPhone may be as little as two to three years away, the person said. Apple is also working on new screen technology, known as MicroLED, but that’s at least three to five years away, Bloomberg News reported last month.

Both features are still in the early research and development stage and Apple could choose to not go forward with the enhancements. An Apple spokeswoman declined to comment.

The work comes as the Cupertino, California-based smartphone pioneer looks to make its gadgets stand out. Smartphones have become increasingly similar as Apple, Samsung Electronics Co., Google, and Huawei Technologies Co. adopt features like full screens, advanced cameras, and facial recognition at roughly the same time.

In the fourth quarter, Apple was responsible for about 20 percent of smartphone shipments following the launch of the iPhone X and iPhone 8, beating out second place Samsung and Huawei, according to IDC. To stay ahead, Apple needs compelling new features and designs. Samsung is already working on a foldable smartphone, while Huawei is seeing increased success in Asia.

Samsung launched a feature called Air Gestures several years ago that lets users accept calls and flip through web pages by waving their hand across the top of the phone. Google’s ATAP research group has been working on similar technology through a program known as Project Soli. Apple’s design would require gestures to be closer to the screen than with Project Soli, the person familiar with the situation said. The feature would be based on technology built into the display itself rather than via a motion sensor on the phone’s bezel, like with Samsung’s implementation, the person explained.

While the Apple projects aren’t imminent, the company has near-term plans to expand OLED technology to more devices, according to other people familiar with the matter. It will release a second iPhone with that type of screen later this year; a larger model with a 6.5-inch screen, up from the 5.8-inch size in the current iPhone X. The company is also working on an update to the iPhone X’s size and a new, lower-cost LCD model.

To access adequate OLED supplies for these new devices, Apple is expanding its sourcing from Samsung to also include LG Display, the people said.

From – Bloomberg

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