▲ Canada Pension Plan Investment Board
Thank you, Mr. Ma
We know nothing gets you more excited than talking about pensions, but there’s a reason to praise the Canada Pension Plan Investment Board right now. Thanks to its foresight, we could all be a little richer. The CPP recently disclosed that it’s sunk about $160 million into Chinese e-commerce company Alibaba over the past few years, which started trading on the New York Stock Exchange today. It’s not clear exactly how much that stake is worth right now—but rest assured it’s worth much, much more. And because we’re all CPP members, we could benefit down the road, too. The CPP hasn’t said yet what it plans to do with its stake, or if it wants to buy more Alibaba shares in the near future. Alibaba is already gigantic, and it’s virtually assured to keep booming. The company is valued at US$168 billion and its IPO was the largest ever in the United States. Analysts are bullish on its prospects. One hiccup is that, despite actions taken by Alibaba itself, vendors on its various online shopping platforms might still be peddling counterfeit goods, sullying the company’s reputation. But hey, if we can use some of our newfound pension wealth to buy some quality Hugo Boast suits on the cheap, we won’t complain.
In what may come as a surprise to many Apple, Samsung, and BlackBerry-loving consumers, it turns out that Sony makes smartphones too. Less surprising is that it’s not very good at it. The Japanese electronics company said it plans to write down the value of its mobile communications unit, and that it expects to lose about $2.15 billion dollars this fiscal year. Sony is also suspending dividend payments to investors for the first time ever. The company has been rocked by competition on all fronts. It sold its money-losing PC division earlier this year and spun out its television unit. As for smartphones, Sony hasn’t been able to gain a foothold because of Apple, Samsung, and low-cost manufacturers in China. Sony executives seem to be floundering and are probably longing for the days when the Walkman reigned supreme. In an interview with the Wall Street Journal this year, the company’s mobile devices chief sounded a bit like a frustrated child on the playground threatening to pick up his marbles and go home: Kunimasa Suzuki said Sony won’t compete in price categories where customers “no longer recognize the Sony brand.” Instead, the company will focus on high-end smartphones and charge a premium. Higher prices for smartphones from a flagging brand? Take my money now, please!