Jack Ma bought Youku, Tencent, Sohu and iQiyi with all cash and at a higher price. They may join forces to fight against Alibaba

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The thing that makes me sigh the most is that Uncle Ma is too rich. First, because he loves football, he invested in Evergrande Taobao casually. As a result, he lost nearly 500 million in two years, but no one took it seriously and went to the New Third Board to ring the bell. Another thing is that he announced the purchase of Youku Tudou 20 days ago, and today he announced that he had reached a final agreement to buy Youku Tudou with all cash + price increase. He loves Ma and paid nearly 5 billion US dollars. He is really rich.

The price offered by Alibaba today is $27.60 per Youku Tudou American depositary share. More than 20 days ago, Alibaba offered $26.6 per share, which is 3.8% higher than the previous offer. According to the data previously cited by the media, Alibaba's acquisition price was about $4.5 billion, so Alibaba's price increase this time means that it will spend an additional $171 million, or about 1.08 billion yuan. Aima, you are really rich, you can raise the price so much without any hesitation.

More importantly, Alibaba paid all in cash, rather than in exchange for shares, which is even more generous. Of course, this may be because shareholders who want to cash out prefer cash, or it may be that Alibaba believes that its stock price still has great room for appreciation and is unwilling to exchange shares.

However, the core of all this is that Alibaba has plenty of cash on its books. According to the financial report released by Alibaba Group, on September 30, 2015, it had cash and cash equivalents totaling 105.691 billion yuan, or about 16.6 billion US dollars. More importantly, Alibaba is still profitable, and its model is destined to be unplugged. In the third quarter, Alibaba Group generated free cash flow from operations of 13.624 billion yuan.

Of course, I think the interesting thing about Alibaba's all-cash acquisition of Youku is how long will Gu Yongqiang stay? Because the normal logic is that if Alibaba wants Gu Yongqiang to stay, it should give him a portion of cash + shares, and then sign a renewal contract, but this time Alibaba gave him all cash. If you were Gu Yongqiang, you cashed out nearly 1 billion US dollars this time, which is much more money than many VCs and PEs manage, and you don't hold Alibaba shares, then what else do you do? Find a place to rest, or do something you like, wouldn't it be nice?

In addition, Bajie feels that now that Youku has settled its sale to Alibaba, there will probably be changes for the remaining companies. Among them, the direction of Sohu Video is the most worthy of attention.

Since the beginning of this year, Sohu Video has reduced its investment in order to reduce losses, which may also put Sohu Video at a disadvantage in the overall video landscape.

Try using Baidu Index as a reference.

The above chart shows the trend of Baidu Index of the four major video websites since January this year. Excluding the high data of iQiyi, the son of Baidu, the trends of the other websites are still interesting: Youku's data this year is relatively stable, but it has declined since August this year; Tencent Video's data this year has begun to approach Youku's. Sohu Video has almost no climax, especially after July this year, the electrocardiogram showed a straight line.

Let's take a look at the comparison over a longer period of time. The following chart shows the trend of the Baidu Index from 2013 to the present.

What I can observe is that Sohu Video was in a tight competition with iQiyi and Tencent Video in early 2013, and since April 2014, Tencent Video's Baidu Index has been rising, and recently, it has begun to approach Youku. Sohu Video has basically maintained a straight trend. Of course, the rise of iQiyi may also be related to Baidu's direct traffic diversion.

Therefore, my overall judgment is that the video industry's model of spending money to buy copyrights, users and traffic will continue, and whoever has money is the boss; with the sale of Youku, Baidu and Sohu's tight funds, and the emphasis on reducing losses and their own stock prices, large mergers and acquisitions are expected to occur.

Well, what the Eighth Sister means is that there will be a new merger between Sohu Video, Tencent Video and iQiyi, and any combination of the three is possible. Hehe, let's see how it develops in the future.