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Alibaba Plays With Paramount, Investment Coming?

Summary

Alibaba's new co-production deal with Paramount suggests the pair could soon form an equity alliance.

This follows Paramount's February announcement that it may sell a stake of itself to a strategic partner.

Alibaba's movie arm, Alibaba Pictures, will help co-produce the next installments in Paramount's popular "Teenage Mutant Ninja Turtles" and "Star Trek" series.

The hyperactive Alibaba (NYSE:BABA) is in yet another major headline today, forming a tie-up to co-produce two of the most successful movie franchises from Hollywood giant Paramount. But what's most intriguing about this latest deal is the timing, since it comes just over a month after Paramount announced it may be preparing to sell a stake of itself to a Chinese buyer.

Paramount announced that intent in late February as part of a broader move by Hollywood to cash in on China's booming box office that is the world's second largest, behind only the US (previous post). Paramount and the other Hollywood studios also like the fact that Chinese buyers are often willing to pay big premiums for big-name brands, which should theoretically help to boost the stock prices of those foreign companies.

We'll return to bigger picture issues shortly, but first let's review the headlines that say...


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