💰 Alibaba wants billions

Industrial giant Dupont broke itself up | Alibaba wants to raise billions | [Finimize](   TOGETHER WITH     Hi {NAME}, here's what you need to know for May 24th in 3:12 minutes.   ☕️ Finimized over an iced mocha at [Roast Club]( in Barcelona, Spain (🌤 21°C/70°F) Today's big stories - US industrial titan DuPont decided to break itself into three, convinced that the sum of its parts will be greater than one whole - India’s stocks are pricey, but there’s a trick to help you get them for less – [Read Now]( - Alibaba was said to be considering raising $5 billion to finance share buybacks and boost AI investments Lean, Mean, Shilling Machines [Lean, Mean, Shilling Machines] What’s going on here? DuPont [announced]( a plan to split itself into three publicly traded companies, as the $33 billion industrial giant saw the merit of the classic “divide and conquer” strategy. What does this mean? DuPont is the latest of many US multinationals to take a trip to Splitsville. The maker of Styrofoam and Kevlar plans to divide its business into three distinct companies over the next two years, allowing each to have a specialized focus in the hope that’ll translate to higher revenue. DuPont will spin off its electronics and water segments, which brought in $4 billion and $1.5 billion of last year’s sales respectively. The remaining “New DuPont” – responsible for $6.6 billion in sales – will be left to concentrate on biopharma, medical devices, and high-profile brands like flame-resistant material Nomex. Why should I care? Zooming out: It’s time to focus. DuPont isn’t breaking new ground here: General Electric split into three ways last month, and Johnson & Johnson recently spun off divisions, too. While there are perks to keeping businesses together, like pooled costs, they can’t compete with the advantages of a smaller, more focused unit right now. See, fewer distractions and more flexibility allows leadership teams to make strategies more targeted. And the cherry on top is that a breakup can let a company get rid of layers of redundant, expensive management. The bigger picture: The sum of the whole. Investors will spend a lot on fast-growing businesses. The problem with big, bulky conglomerates, though, is that it’s tricky to untangle their different revenue streams and products from the outside. That makes it harder for investors to accurately value a firm, and the resulting uncertainty could scare them off. So by stripping out the complexities, costs, and admin that come with size, DuPont may well find that its individual businesses are valued higher as three parts than one whole. You might also like: [How to analyze a stock in five easy steps](. Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? Let us know and we'll mention it when we reply.&noapp=true&subject=Lean, Mean, Shilling Machines&utm_campaign=daily-global-24-05-2024&utm_source=email) Analyst Take How To Buy India’s Red-Hot Stocks On The Cheap [How To Buy India’s Red-Hot Stocks On The Cheap]( [Photo of Reda Farran, CFA] Reda Farran, CFA, Analyst [India’s stocks]( are hot-to-touch right now. They've risen more than 30% over the past year, with investors excited about the country’s rapidly expanding, consumption-driven economy. Naturally, the country's stocks have been left looking pretty pricey. But I found a way you can [get in on the cheap](. That’s today’s Insight: [how to buy India’s red-hot stocks on the cheap](. [Read or listen to the Insight here]( SPONSORED BY STREETBEAT Make college more affordable with every investment you make College is only getting more expensive. In fact, 77% of US families say it’s too pricey for them. 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All investing involves risk, including the possible loss of money you invest, and past performance does not guarantee future performance. Any historical returns, expected returns or probability projections are hypothetical and may not reflect actual future performance. See Terms and Conditions at [Streetbeat.com](. When you support our sponsors, you support us. Thanks for that. If you want your brand featured here, [get in touch.]( Quell Surprise [Quell Surprise] What’s going on here? Reports [speculated]( that Chinese tech giant Alibaba is considering raising billions through an unexpected type of funding. What does this mean? Alibaba makes most of its money from ecommerce – but these days, it’s being forced to share that cash cow with local Chinese rivals like ByteDance and PDD Holdings. The company’s cloud business has done little to cushion that blow: the division has been trailing behind US competitors like Amazon Web Services for over two years now. Add in a bout of turmoil from within the company’s own offices, and Alibaba’s shares are down nearly three-quarters from their peak in late 2020. But Alibaba has a plan to push the stock back up: funnel a ton of cash into AI and buy back billions of dollars of its own shares, since reducing supply should increase prices. To pull that off, though, the firm needs to find some pocket money. Why should I care? Zooming in: I'm not a regular bond, I'm a "cool" bond. Alibaba is reportedly considering selling “convertible bonds” to raise around $5 billion. They’re like regular bonds, except they can be swapped for shares at a later date – usually if or when the stock reaches a certain pre-set price. And because they come with that extra perk, convertible bonds tend to pay less in interest than normal ones. That allows firms to borrow on the cheap side, without immediately watering down the value of their stock by issuing brand-new shares. The bigger picture: JD did it first. JD.com might have inadvertently pushed Alibaba into action: the rival company successfully [issued]( $1.75 billion in convertible bonds earlier this week, with eager investors buying more than the initial target of $1.5 billion. And while Alibaba currently pays more than 5% interest on its regular bonds, JD only needs to hand out 0.25% on those convertible bonds. So if Alibaba can get a similar deal, it’ll save a ton on interest expenses. You might also like: [Here’s why firms are still managing to raise cash, even when rates are high.]( Copy to share story: [( 🙋 [Ask a question](mailto:questions@finimize.com?body=Ask us a question: Where are you writing from? 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