Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Alibaba Group Holding Ltd (BABA) Invest $200 million In Snapchat: What Can Alibaba Gain From This?

Alibaba Group Holding Ltd (NYSE:BABA) has turned a lot of heads since its very successful IPO in 2014. This company is a monster in China, which has a huge cash reserve, unlike many other tech companies in United States. What should they do with that Money? Make smart investments would be a sensible answer to that and some reports suggests that Alibaba Group Holding Ltd (NYSE:BABA) has made $200 million investment in Snapchat. Only time will tell if this is a smart investment from Alibaba Group Holding Ltd (NYSE:BABA) or not. Meanwhile, CNBC’s Dominic Chiu and Jag Bath, Senior Vice President of Product, discussed about Alibaba Group Holding Ltd (NYSE:BABA)’s investment in Snapchat on CNBC.

Alibaba, is BABA a good stock to buy, Taiwan, startups, investment,

Chiu pointed out that valuation of this investment could be $15 billion. Bath accepted that it’s a huge deal. He added that Alibaba Group Holding Ltd (NYSE:BABA) is the largest tech company in China and unlike large tech companies in US, Alibaba Group Holding Ltd (NYSE:BABA) is sitting on a huge pile of cash. He said that they got to something about cash like acquisitions or investments.

“[…] We have seen investments like this in the past. Microsoft made an investment in 2007 in Facebook. And actually more recently Yahoo made an investment in Alibaba of about $1 billion for a 40% stake in 2005. Recently, when Alibaba went public, they had a hugely successful IPO, which resulted in $40 billion return for Yahoo. I think when Alibaba look at a company like Snapchat, they are certainly looking at this from an investment stand point and putting that cash to good use, but also it’s a great learning experience for them,” Bath said.

Bath mentioned that Snapchat has a huge user base, close to 200 million. He feels that this would be a great learning experience for a company like Alibaba Group Holding Ltd (NYSE:BABA), especially when they invest deeply in mobile services in China and US.

But what can Snapchat do differently from this investment? Bath thinks that Snapchat faces a huge challenge in monetizing the user base and he feels that they could use the investment from Alibaba Group Holding Ltd (NYSE:BABA) and other investments that they received recently to improve the technology and infrastructure. He added that they need to be cautious in increasing their ad revenues by advertising without disrupting the user experience in Snapchat.

Disclosure: None

I just made 84% in 4 daysI Just Made 84% in 4 Days By Blindly Following This Hedge Fund

I just made 84% in 4 days by blindly imitating a hedge fund’s stock pick. I will tell you how I pulled such a huge return in such a short time but let me first explain in this FREE REPORT why following hedge funds’ stock picks is one of the smartest things you can do as an investor. We launched our quarterly newsletter 2.5 years ago and not one subscriber has, since, said “I lost money by EXACTLY following your stock picks”. The reason is simple. You can beat index funds by creating a DREAM TEAM of hedge fund managers and investing in only their best ideas. I just made 84% in 4 days by blindly imitating one of these best ideas. CLICK HERE NOW for all the details.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.