Did Bob Peck Call The Alibaba-Snapchat Investment Last Year?

News broke Wednesday night that Alibaba Group Holding Ltd BABA plans to invest $200 million in the social media startup Snapchat.

SunTrust's Bob Peck was one of the first to publicly comment on the news.

"Given recent press reports," he wrote, "we thought it would be helpful to repost our Jan 2014 note: Ten Reasons Alibaba Should Buy Snapchat."

Related Link: Report: Snapchat May Get Cash From Alibaba

In other words, he saw a relationship coming a year earlier. Here were Peck's 10 reasons:

"1- Alibaba could afford it and make the investment in stock which has been estimated as high as $200b and could also give Snapchat's investor more upside on the Alibaba IPO."

"2 - Competition for messaging apps globally continues to increase with several players having large user bases in Asia including Tencent's WeChat, KaKao Talk, LINE, as well as Kik and Whatsapp. Alibaba understands the value of a prominent messaging platform and social networks, as it has demonstrated with its ~$580m investment in Sina's Weibo and partnership on payments."

"3 - Alibaba sees the US as a strong growth market and is already making investments, such as its recent investment in Shoprunner – where it supplied the majority of the most recent $206m round according to reports."

"4 - If press reports are accurate, Marissa Mayer at Yahoo! sees the value of Snapchat and could help advise Alibaba on the strategy (given Yahoo!'s 24% ownership in Alibaba)."

"5 - Alibaba is driven by commerce, and social commerce is still the Holy Grail that many companies like Twitter, Facebook, Foursquare, and Amazon have been aiming for."

"6 - Snapchat could explode its user base if Alibaba could facilitate growth in China."

"7 - Snapchat would find its revenue model: facilities e-commerce transactions."

"8 - As many expect Alibaba to enter the US market more robustly in 2014, a fast growing social network would bolster its portfolio of services against the incumbent US competition."

"9 - If Alibaba wanted to do a transaction of this size, it should be done while still private (a la Facebook / Instagram)."

"10 - The combination of Alibaba with a strong social and messaging platform like Snapchat adds to the potential for optionality. They could leverage the sharing network in areas like subscriptions, video content, and search monetization in addition to ecommerce. To put the leverage more in a domestic analogy – what if Amazon owned Snapchat?"

Expect for points No. 4 and 9, Peck's original logic is fairly unchanged.

Yahoo! Inc. YHOO spun off its Alibaba stake earlier this year, almost four months after the company went public.

Alibaba shares are up slightly in pre-market trading on Thursday.

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Posted In: Analyst ColorTop StoriesAnalyst RatingsTechBob PeckSunTrust
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