Alibaba IPO may raise as much as $24 billion

NEW YORK (CNNMoney)

The Chinese e-commerce giant, which will begin trading under the ticker BABA later this month, submitted a regulatory filing Friday that says it plans to price its shares between $60 and $66. If its underwriters claim their shares, the company could raise $24.3 billion, which would be the biggest stock debut in history.

The range Alibaba offered would value it somewhere between $148 billion and $163 billion.

Related: Who the heck is Jack Ma? Meet the man who built Alibaba

Even if Alibaba skews toward the conservative end of that range, it would raise $22.1 billion, eclipsing the largest American IPO to date: Visa (V), which raised $17.9 billion and beating global record holder Industrial & Commercial Bank of China (IDCBY), which raised about $21 billion in 2006.

Related: Meet the four kings of Alibaba's online retail empire

Yahoo (YHOO, Tech30), which is the second-largest holder of Alibaba equity, will cut its stake to 16.3% from 22.4%, the filing notes. Japanese bank SoftBank will cut its stake to 32.4% from 34.1%. Alibaba founder and CEO Jack Ma will cut a percentage point off his 8.8% stake.

First Published: September 5, 2014: 5:16 PM ET

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Vice's quest for "total media domination" continues

NEW YORK (CNNMoney)

That goal, espoused by chief executive Shane Smith, seems a little more attainable now that it's received twin investments of $250 million each from A&E Networks and the Silicon Valley investment firm Technology Crossover Ventures.

The cash infusions, announced this week, value the firebrand Brooklyn-based news agency at more than $2.5 billion. They'll help Vice expand on multiple platforms, including television, while maintaining independence and the edgy qualities that have made it a popular news and entertainment source among millennials.

Why is 10 percent of Vice worth $250 million? "They're probably the best positioned company to take advantage of all those trends," TCV general partner Woody Marshall said in a telephone interview. "That's a big prize."

With the deal Smith and Vice Media can now allocate funds to the digital side of the site strengthening their online experience for users.

For Vice this means greater growth in mobile and online distribution.

"I hope Shane is able to accomplish his goal, his quest for media domination," Marshall added. "This will be the most important media company in the next decade."

Bold words -- but then again, Smith has frequently spoke of wanting to be the "next CNN" and "next MTV."

CNN's parent company Time Warner was in talks about a potential deal with Vice earlier this summer. But the talks dissolved last week, reportedly because the two sides could not agree on a valuation of the company.

While the A&E partnership will likely focus on programming -- Smith has made no secret of the fact that he wants a 24-hour cable channel for Vice -- the TCV deal will help Vice keep growing its digital content production.

"We had the meeting of the minds... and believed in what their vision was," Marshall said. "It came together quite quickly."

TCV has other investments in other major media companies -- Netflix, Facebook and Spotify to name a few -- and believes that Vice, like the others, can cover the full media spectrum.

Smith sounded appropriately ambitious in a press release about the new two investors: "We believe that these new partnerships position us at the forefront of the coming convergence of media and technology, while preserving and protecting our independence."

First Published: September 5, 2014: 4:52 PM ET

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Ultimate office decoration: Stock certificates

A Disney stock certificate signed by Michael Eisner.

NEW YORK (CNNMoney)

In nice frames, the president of Chase Investment Counsel displays stock certificates from PlanetRx and ValueAmerica.

Remember those? They were Internet stocks that took off in the late 1990s -- PlanetRx traded close to $200 a share at one point. Today, they're worthless because the companies went bankrupt.

Beneath the ornate certificates, Tuz has charts that display the massive rise and fall of these two stocks during the Dot Com bubble.

"I just like to look at that," Tuz told CNNMoney. "It's a good way to point out to visitors here -- be careful what you buy in an IPO."

He's glad he never actually owned those stocks. He just purchased the "worthless" paper as a collector's item for a very reasonable cost.

Up until the past few years, investors would get stock certificates when they purchased shares of a company -- it was expected, like the toy that comes with a McDonald (MCD)'s Happy Meal. But as trades moved online, the process of waiting for a certificate to arrive in the mail and getting it notarized for a sale became cumbersome.

Companies are no longer required to issue paper stock certificates. But it's big business to re-sell historical ones. It's become a hobby akin to collecting baseball cards or art.

It's a big market: Type in the words "stock certificate" on eBay (EBAY, Tech30), and over 16,000 active listings come up in the U.S. alone.

"A lot of times people get certificates just as art work. You hope over time that it will appreciate, but you get it to put on your wall. It's a conversation starter," says Bob Kerstein, founder and CEO of Scripophily.com, a leading website that sells and values old stock and bond certificates.

Most certificates sell for $20 or less -- similar to buying a poster for your wall. But coveted ones can go for thousands of dollars. If you find some in an attic or old filing cabinet, it's worth checking to see if they can still be redeemed -- or sold as a piece of history.

The most popular ones: Much like art and baseball cards, the stock certificates that command top dollar are either extremely rare, very colorful and/or signed by someone well known.

A stock certificate from the 1998 Goldman Sachs IPO

Disney (DIS) is often in demand. The much beloved certificates have Mickey Mouse, Donald Duck, Tinkerbell, Winnie the Pooh and other famous cartoons on them.

In a blow to collectors, Disney stopped issuing paper certificates in October of 2013, joining the ranks of the 1,000 companies that no longer issue certificates, according to DTCC, a financial clearing and settling firm.

That's only added to the allure of the existing ones. On Scripophily.com, a Disney stock certificate signed by Michael Eisner when he was chairman is listed for $395.

Then there's the nude: Playboy also has special status as it was the only certificate bearing the image of a nude when the company went public in the early 1970s: a reclining Willy Rey, the magazine's Miss February 1971. It became such a novelty that there were about 14,000 people who bought just one share, according to a company spokesman.

Today collectors are drawn to tech names they recognize says Kerstein.

AOL (AOL, Tech30) certificates and Microsoft (MSFT, Tech30) ones signed by Bill Gates are also popular, as are the Goldman Sachs (GS) IPO notes.

Rockefeller stock rocks: The certificate that commands the most demand though is from a company that went defunct in 1911: Standard Oil. The reason is that one of America's most prominent businessmen -- John D. Rockefeller -- was the founder and chair of the company and signed the stock certificates.

Over a century later, people pay $2,000 or more for a piece of paper with his signature.

First Published: September 6, 2014: 7:43 AM ET

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Wall St. drools over El Pollo Loco's earnings

El Pollo Loco has 401 restaurants, mostly located in California.

NEW YORK (CNNMoney)

Shares El Pollo Loco's stock rose as much as 5% Thursday evening after the company released earnings for the first time since going public.

El Pollo Loco said quarterly sales are up about 6%. It also turned a profit, earning $6.1 million compared to the $410,000 it made during the same quarter last year when the company was still private.

It went public on July 25, opening at $15 per share and immediately jumping 60% to finish the day above $24. Shares closed Thursday at $34.79.

Related: Investors go LOCO for grilled chicken stock

The California-based restaurant chain specializes in Mexican-style grilled chicken. It competes with Chipotle Mexican Grill (CMG) and other fast-casual restaurants like Chick-fil-A and Yum! Brands (YUM) KFC.

El Pollo Loco (LOCO) has 401 company-owned and franchise locations in five states, including Texas and Arizona. But the vast majority of its restaurants are in the Golden State.

The company said Thursday that it expects to open more than a dozen new stores before the end of the year, including its first in the Houston area.

First Published: September 4, 2014: 7:26 PM ET

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It's official: Nevada gets Tesla's Gigafactory

NEW YORK (CNNMoney)

"It's a great day in Nevada, and it's a great day for Nevada," said Governor Brian Sandoval at a press conference to announce the facility.

The deal was announced Thursday after months of wrangling between California, Texas, Arizona and New Mexico. It will cost the state $1.25 billion in tax breaks and other incentives, Sandoval said. It is expected to generate $100 billion in "economic impact" over the next 20 years.

Related: Tesla's future rides on massive battery plant

The Governor also said about 6,500 jobs will be created directly at the plant, but as many as 22,500 jobs will be created in the state because of the project. The state's economic development office estimates that the factory will add $1.9 billion to state and local coffers over the next two decades, with a quarter of it going to K-12 education.

Tesla (TSLA)'s massive factory, which could cost an estimated $4 billion to $5 billion is aimed at easing the path to a cheaper electric car, the Model 3. The key is reducing the cost to build more of the lithium-ion batteries that its cars use.

Tesla hopes the Model 3 will cost between $30,000 to $40,000. The flagship Model S costs nearly $70,000 and Tesla's upcoming crossover, the Model X, will cost about that much. Panasonic (PCRFF) will partner with Tesla on the Gigafactory, which broke ground in July.

Related: Consumer Reports calls the Model S the best car ever, with caveats

The lion's share of Tesla's incentives are in taxes it won't have to pay, reports the Reno Gazette-Journal. That means $725 million in sales tax breaks over 20 years and $332 million in property tax breaks over 10 years, with most of the rest coming from tax credits.

The battery factory will also get $8 million in discounted electricity rates, the paper said. Tesla will be allowed to sell its cars directly in Nevada without a franchise agreement, which has been a sticking point in other states.

"The Gigafactory is an important step in advancing the cause of sustainable transportation and will enable the mass production of compelling electric vehicles for decades to come," Tesla CEO Elon Musk said in a statement.

First Published: September 4, 2014: 7:40 PM ET

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Who the heck is Jack Ma? Meet the man who built Alibaba

HONG KONG (CNNMoney)

Harvard snubbed him. He flunked college entrance exams twice. Investors thought the serial entrepreneur was crazy when he started building an e-commerce site in China.

But Ma proved them all wrong. Alibaba, which he launched in 1999 from his tiny Hangzhou apartment, is set for one of the largest IPOs in U.S. history.

Analysts estimate that Alibaba -- which does most things digital -- could be valued at $200 billion, roughly four times the market cap of Lockheed Martin (LMT).

How did an English teacher with a modest translation business become a tech titan? It began with a drink.

Searching for "beer" and "China" during his first use of the Internet in 1995, Ma found nothing. But there was plenty of information about American beer. And German beer.

Sensing an opportunity, Ma built a Chinese-language webpage. Within hours of launch, he was receiving enquiries from around the world. The Internet, Ma thought, is "going to change the world and change China."

A few years later, in 1999, Ma gathered 17 friends and acquaintances at his home. They worked feverishly on a new venture: a website to connect exporters with foreign buyers.

Alibaba.com was born. The firm quickly outgrew Ma's apartment, eventually becoming the dominant tech company in China.

The comedian is our CEO

Ma, 49, has always been proud of his humble roots. When Alibaba launched, Ma had no money, no tech experience and a haphazard management style.

But he did have plenty of charisma. Former executives say Ma's infectious optimism -- and his talent with languages -- helped sell the dream.

"He's funny! He can do standup in Chinese or English," said Duncan Clark, a former Alibaba consultant. "He can adapt to the audience ... he has the ability to make everybody in the room feel as if he's talking to just one person."

Ma, married with two kids, is also known to rely on gut instinct.

"He cares more about what is in someone's heart than what is on their resume," said Porter Erisman, a former executive who made a documentary about the company. "Look at the senior managers -- at Alibaba, a lot of them had no prior business experience."

Employees are "Ali people," and managers are given nicknames taken from popular Chinese martial arts novels. Ma, a tai chi devotee, sometimes draws inspiration for company strategy from those books.

The Yangtze River crocodile

Ma is also a ferocious competitor, and steadfast in his belief that Chinese firms can take on international rivals.

"Chinese brains are just as good ... this is the reason we dare to compete with Americans," Ma told his fellow co-founders in 1999. "We can beat government agencies and big famous companies, because of our innovative spirit."

It was this conviction that led Ma to challenge eBay in 2003 when the Silicon Valley firm was expanding its China operation.

Spoiling for a fight, Ma sent a team back to his apartment to devise the next big thing. "EBay is a shark in the ocean; we are a crocodile in the Yangtze River," he said. "If we fight in the ocean, we will lose, but if we fight in the river, we will win."

The team came back with a product called Taobao, or "searching for treasure," in Chinese. The platform was similar to eBay, but better suited to the local market.

Yahoo (YHOO, Tech30) invested $1 billion in the venture. Within a few years, Taobao squeezed eBay out of China. The marketplace handled $177 billion in sales in 2013.

"Ali People" flock to Alifest

Alibaba is a global company with 22,000 employees and 90 offices. Its popular sites, Taobao and Tmall.com, account for 80% of China's online retail sales, and receive more than 100 million visitors a day.

The group and its affiliates operate an e-payment business, online investment funds, cloud computing and mobile services. Remembering how difficult it was to get financing for his translation business, Ma started a loan service to help entrepreneurs.

Alibaba is also getting into entertainment and sports, acquiring media companies and a soccer team in a pre-IPO buying spree. Critics say this is irresponsible -- a last hurrah before Ma is beholden to shareholders.

Ma stepped down as CEO in 2013, and now pursues philanthropic endeavors. But he remains chief strategist at Alibaba, and the public face of the company. He is, by all accounts, still very involved in management decisions.

Once a year, employees and customers turn their attention to Alifest -- a conference that at times resembles a rock concert. The blowout event has featured guests including Bill Clinton and Kobe Bryant.

"Alifest convinced me to join Alibaba," said former executive David Wei. "I've never seen so many happy customers, so many happy employees."

Ma performs at these gatherings, donning sparkly costumes and belting out popular tunes. The crowd always goes wild.

"I never thought I would be where I am today," Ma said in a speech last year. "I never thought Alibaba would be where it is today."

First Published: September 4, 2014: 9:49 PM ET

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IRS eyes tax on Silicon Valley's free lunches

Tri-tip, white bass or shallot seared chicken breast? How about all three? Employees get it gratis at some big tech companies like Google.

NEW YORK (CNNMoney)

That's what the IRS is questioning.

As highlighted in a Wall Street Journal story this week, the IRS is scrutinizing when free employee meals - a daily occurrence at Silicon Valley giants like Google (GOOG), Twitter (TWTR, Tech30) and Facebook (FB, Tech30) -- should be a taxable benefit.

In fact, the agency has added the issue of employer-provided meals to its list of top tax priorities for the coming year.

Were the meals to be treated as taxable, the cost of the food would be considered income to the employee. That means the employer would owe its share of payroll tax on that money and the employee would owe income and payroll tax on it as well.

Related: Inside Twitter's cafeteria

So will the increased scrutiny of the IRS mean the end of Silicon Valley's gratis gourmet lunches?

Not necessarily - or at least not anytime soon.

Under today's rules, providing occasional food and beverages to workers -- e.g., free coffee, soda and snacks - is considered a "de minimis" meal and is not considered taxable. Nor are full meals regularly provided on-site, so long as they're served for the "convenience" of the employer.

For instance, a company may provide meals to workers on deadline-driven projects that require long hours and weekends. Or a company may offer free food when the business is located far from restaurants or when lunch hour is the busiest time of day for the company.

In all cases when an employer serves food at work, it can deduct the cost as a business expense.

Should the IRS decide to change its guidance on what is considered a "convenience" for the employer, it could take 9 months to a year to take effect because changing guidance on a tax issue is a multi-layered process, said John Roth, senior federal tax analyst for tax publisher CCH.

Related: How companies shrink their taxes by leaving U.S.

What's more, Roth said, big companies with deep pockets may decide it's worth the money to fight the IRS on this one.

The IRS had no comment on the matter.

It's also possible the agency will get too busy to address the issue this year. Employer-provided meals has to compete with the more than 300 other priorities the IRS has listed -- a lot for an agency that many argue is already underfunded and overburdened.

But the fact that it made the IRS priority list at all may suggest that the agency thinks the issue is low-enough hanging fruit that it justifies the investment, said Christopher Bergin, president and publisher of Tax Analysts.

Still, it would hardly be the biggest payday around. The cost of companies writing off employee meals and lodging (which encompasses much more than those companies serving free meals every day) is about $2 billion a year, according to a recent estimate from the Joint Committee on Taxation.

Cracking down on the meals exclusion piece of that may be low-hanging fruit, but it's peanuts relative to the estimated $400 billion gap in total tax revenue owed but not paid every year.

"This is a bit like going through garbage cans" to dig up change, Bergin said. Then again, "you've got to start somewhere."

First Published: September 3, 2014: 6:32 PM ET

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Michael Bloomberg is back on top at Bloomberg

NEW YORK (CNNMoney)

He is one of the richest men in the world. And now, after 12 years as the mayor of New York City, Bloomberg is once again taking over Bloomberg LP, the financial media company that he founded 30 years ago.

His return immediately stirred speculation about how the company -- best known for its data terminals, but determined to be a household name for news, as well -- might evolve in the years ahead.

Bloomberg, the company, announced the leadership change on Wednesday evening. It came about nine months after Bloomberg, the man, left office and began to spend time in his company's newsrooms.

"I never intended to come back to Bloomberg LP after 12 years as mayor," he said in a statement.

Indeed, he said in an interview last fall that "I'm not going back to Bloomberg LP" and that "I want to do a number of different things."

Related: Explore the future of media

While serving as mayor, Bloomberg retained his ownership of the media company, but was not involved in its daily operations. One of his former deputy mayors, Daniel Doctoroff, has been the president of Bloomberg LP since 2008 and the CEO since 2011.

So what happened? The more Bloomberg reacquainted himself with his old company, "the more exciting and interesting I found it -- in large part, due to Dan's efforts," he said in a statement on Wednesday.

"I have gotten very involved in the company again and that led to Dan coming to me recently to say he thought it would be best for him to turn the leadership of the company back to me," he added. "It was a gracious and thoughtful offer and one that I finally accepted after significant pushback and great reluctance."

Related: Bezos picks new Washington Post publisher

Bloomberg and Doctoroff acknowledged in a joint interview with The New York Times that the founder's return had made Doctoroff's job more difficult. Doctoroff told The Times that Bloomberg "is kind of like God at the company."

"You have to understand that when God comes back, things are going to be different. When God reappeared, people defer," he said.

Doctoroff indicated in a press release that he did not have another job lined up. "I welcome the opportunity to embark on a new chapter and, in time, will decide what's next," he said.

What's next for Bloomberg is up to ... Bloomberg. Most of the company's revenues -- which are expected to total $9 billion this year -- come from expensive subscriptions to terminals. Many financial professionals are dependent on the terminals, but Bloomberg is facing competition on a number of fronts, including from some of the big banks that pay big money for subscriptions.

Related: Glenn Beck sought out CNN deal, but talks died fast

In a bid to diversify, the company has expanded into markets like law and alternative energy and has made a number of impressive hires at Bloomberg News and the opinion section Bloomberg View. But there are persistent doubts about the company's commitments to revenue sources that don't involve the terminals.

If Bloomberg the man seeks to broaden his influence, he may double down on the company's news operation. (One of the bullet points in Wednesday's press release said that during Doctoroff's tenure, Bloomberg News enhanced "its global influence through expanded digital and television presence and the acquisition of Bloomberg Businessweek.")

Toward the end of Bloomberg's time in office, there were waves of speculation about his interest in buying The New York Times or the Financial Times. He has generally demurred, but never ruled out a newspaper purchase altogether.

More recently, Bloomberg was asked in a Fox News interview if he'd consider buying CNN, if Time Warner (TWC) were to put the network up for sale.

"You never say never, but in this case I can say, probably never," Bloomberg said.

First Published: September 3, 2014: 9:24 PM ET

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Broadway hits yield huge returns for investors

The Phantom of the Opera, which opened in 1988, is Broadway's longest-running show.

HONG KONG (CNNMoney)

The difficult task of financing a Broadway production starts about a year before the premiere. Shows cost millions to produce, and four out of five lose money.

But if the production is a smash hit, investors stand to earn truckloads of cash.

"Investing in Broadway shows is like drilling for oil," said Ken Davenport, a Tony Award-winning Broadway producer. "You have to drill a lot of holes, but once you get a gusher, that thing just gushes for a long time."

The Phantom of the Opera -- the longest-running Broadway show and the most successful production ever -- has grossed $5.6 billion worldwide since it opened more than 25 years ago.

That kind of success has lured financiers looking for a different kind of investment -- a moneymaker that supports the arts and can also be enjoyed by members of the public.

Broadway sold tickets worth $1.3 billion last year, bringing in 12.2 million people. That tops the combined attendance for the 10 professional sports teams in New York and New Jersey.

Cashing in big isn't the only draw. There are also plenty of insider bonuses.

"If you buy 100 shares of Coca-Cola (CCE), they're not going to send you a free six pack," Davenport said. "The cool thing about investing in Broadway is that there are a ton of perks -- you'll get tickets to opening night, parties, industry events ... and you could be eligible to win a Tony Award."

Related: Wealthy investors flock to fine art funds

Broadway producers are responsible for pitching their musicals or plays to investors -- much like an IPO roadshow. There's usually a minimum investment of $25,000 -- though that gives investors little say, if any, in the production.

Many producers also take a stake as a show of confidence, and don't see a cent until other investors recover their capital.

"I always put my own money in ... I must have skin in the game -- there's no question about it," said Tony-nominated producer Amanda Lipitz.

While most profits come from ticket sales, popular shows often develop other revenue streams.

Investors -- called "angels" in industry jargon -- can turn an even greater profit once popular shows begin touring, sell movie rights or are licensed for school performances.

"A portion of that money does drip back to the original investors," Davenport said. "There's a tremendous amount of money that can come in that way."

Related: Disney plans to milk 'Frozen' success

Musicals can cost $7 million to $15 million depending on the show. Spiderman, the most expensive Broadway production in history, cost a whopping $75 million. Plays are cheaper to stage -- between $2 million and $4 million -- but they have less time to recoup costs as they usually have a shorter run.

Investing in Broadway has typically been a private affair limited to wealthy individuals who are already connected to the scene. The SEC requires Broadway investors to have a net worth of at least $1 million, or make $200,000 a year.

Some producers are working to solicit new investors through the Internet, and production houses have begun to offer theater funds that invest in a basket of shows.

Experts say there's no magic formula to picking the next hit. Rumor has it that Les Misérables -- now the fifth longest-running Broadway show -- wasn't popular with investors.

But, as they say, the show must go on.

"The investors really are angels, I believe," Lipitz said. "The show wouldn't happen without them."

First Published: September 3, 2014: 10:31 PM ET

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Friday Links

NEW YORK (CNNMoney)

A weekly collection of design, data and interactive links.

Design/Data viz
Forms of color | Vintage illustrations exploring color systems
Police Punishment: CCRB vs NYPD | Interactive analyzing NYPD complaint data
Futuristic UI | Video and stills from the short SIMIAN

Photo/video
Serendipity | Every second, a few people hit "play" on the same track at the same time
Zaha Hadid | Zaha Hadid's Wangjing Soho complex nears completion in Beijing
Instagram programming | A look at what goes on behind the scenes at Instagram

See last week's links

Have a nice weekend!
@dubly and @talyellin

First Published: August 29, 2014: 7:08 PM ET

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