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Alibaba Top Execs Ma, Tsai, Spending $500 Mil To Repurchase Shares

Showing confidence in a bid to boost a slumping stock amid China’s economic weakness, Alibaba ( BABA ) senior executives Jack Ma and Joe Tsai will spend a combined $500 million to buy company stock. Alibaba confirmed the repurchase decision by Ma, executive chairman, and Tsai, executive vice chairman. It will be part of a $4 billion stock buyback plan that Alibaba announced in August. Alibaba stock was up more than 4%, near 70, in afternoon trading in the stock market today . The China e-commerce leader went public in 2014 with shares priced at 68, in the largest initial public offering on a U.S. stock exchange. The stock hit an all-time high of 120 in November 2014. Since then, the stock has dropped on concerns about a slowing China economy, accusations of selling counterfeit goods on its e-commerce websites, and increased competition from JD.com ( JD ) and others. Alibaba reported better-than-expected quarterly earnings on Jan. 28, boosted by strength in mobile and defying concerns of a weak Chinese economy, but growth slowed for a key metric, and shares fell. Revenue for its fiscal Q3, which ended Dec. 31, rose 32% in local currency to $5.3 billion. Earnings per share minus items of 99 cents rose 16%. But Alibaba showed slowing growth in the total value of goods sold, or gross merchandise volume, on its platforms. Addressing the China economy in the conference call, Tsai said that China is going through a structural shift from high growth to more moderate but more sustainable growth. “China is still one of the fastest-growing economies in the world, and we have no reason to think anything different in the foreseeable future,” Tsai said on the call. JD, Alibaba’s main rival in China’s burgeoning e-commerce field, is set to report Q4 earnings before the market open Tuesday. Image provided by Shutterstock .

Verizon, Vodafone, China Mobile Surface in Different 5G Camps

Will Verizon Communications ( VZ ) and Vodafone Group, one-time partners, be on different sides in the 5G wireless standards debate? Next-generation 5G services were a hot topic at last week’s Mobile World Congress in Barcelona, Spain. Vodafone ( VOD ) surfaced as a surprise member of a group of wireless phone companies aiming to meld two variants of LTE (long-term evolution) technology as a path to 5G. Those companies include China Mobile ( CHL ), India’s Bharti Airtel, South Korea’s KT ( KT ), Japan’s SoftBank ( SFTBY ) and Vodafone. SoftBank controls U.S.-based Sprint ( S ). Verizon, on the other hand, said at the MWC that it will cooperate with Japan’s NTT Docomo ( DCM ), KT and SK Telecom on possibly different  5G specifications . Verizon in early 2014 bought out Vodafone’s 45% stake in their U.S. wireless joint venture, Verizon Wireless, for $130 billion. Two variants of LTE have existed in 4G networks worldwide. China Mobile, with the government’s backing, developed the “TD” variant, which stands for “time division” communications. Most of the world, including Verizon and Vodafone, used “FD,” or “frequency division” communications, in their networks, constructed starting in 2008. U.S. chipmaker Qualcomm ( QCOM ) has intellectual property tied to the “FD” LTE variant. China’s government, meanwhile, has been keen on harmonizing the TD and FD variants, aiming to help companies such as Huawei sell network equipment and mobile phones abroad. In India and China, mobile phone makers have sold 4G devices that support multiple transmission modes. India’s biggest wireless firm, Bharti Airtel, and Japan’s SoftBank were earlier adopters of TD-LTE. Vodafone, meanwhile, has been working with Sweden-based telecom gear maker  Ericsson ( ERIC ) and Huawei in some countries to meld the FD and TD technologies. At MWC, the five wireless firms — China Mobile, Vodafone, Bharti, KT and SoftBank — said they would support a five-year strategic plan to build a 5G “ecosystem” and converge the TD and FD technologies. Verizon, NTT and their partners, meanwhile, set technical trials for 2016 through 2018. Verizon’s 5G partners include Alcatel-Lucent ( ALU ), Ericsson, Cisco Systems ( CSCO ), Nokia ( NOK ), Qualcomm and Samsung.

Google, Alphabet Could Be Big Winners From Intel-IRS Tax Dispute

Alphabet ( GOOGL ), which owns search leader Google, could collect least $3.5 billion in new tax benefits if Intel ( INTC ) succeeds in its longstanding international tax dispute with the Internal Revenue Service, according to the Wall Street Journal. The speculated amount exceeds Google’s entire 2015 tax cost, according to a report Monday by the Journal. Alphabet, Intel and the IRS all declined to comment. “If Google is $3.5 billion, there must be many other companies that have billions of dollars at stake on this issue,” Reuven Avi-Yonah, a tax law professor at the University of Michigan, told the Journal. Alphabet is “paying a huge amount of attention to this case, because this is probably the largest unresolved tax issue that high technology companies now have,” Eric Ryan, a partner at the law firm DLA Piper, told the newspaper. The broader tech industry is also watching the case, which the IRS appealed to the 9th U.S. Circuit Court of Appeals last week. At least 20 companies, including Microsoft ( MSFT ) and eBay ( EBAY ), have disclosed that they also are monitoring the outcome of the case involving share-based compensation, according to the report. The dispute has been brewing since 2003, part of a battle between the IRS and companies over what are known as cost-sharing arrangements between U.S. corporations and their low-taxed foreign subsidiaries. In its annual report, Alphabet recorded a potential $3.5 billion benefit, citing a lower court’s ruling. That was offset by a $3.5 billion deferred tax liability, meaning it didn’t result in a major one-time boost to the company’s earnings, the Wall Street Journal said. In its 10-K, Alphabet said it couldn’t take the whole tax benefit because it hasn’t decided whether it can and would put any gains, should Intel win, into its own offshore subsidiaries — keeping its money outside the reach of the U.S. The company could record the benefit after the court case concludes. Intel inherited the case from Altera, which it acquired last year. That case involved about $80 million in corporate expenses from 2004 to 2007, according to the U.S. Tax Court decision. Altera’s dispute was about whether share-based compensation — but not salaries — should be included in those costs. Altera challenged an IRS regulation stating that share-based compensation must be included in the cost-sharing pool. The IRS regulation meant that the foreign company had to pay for this and deduct the amount from its lower-taxed income, said the Journal. Alphabet stock was up a fraction in early afternoon trading in the stock market today , near 728. This month, Alphabet posted a  Q4 earnings beat , but revenue from the company’s stable of speculative, non-search-related “other bets” missed analyst expectations. Image provided by Shutterstock .