Mergers & Acquisitions Investors Would Love to See: Alibaba (BABA) and MercadoLibre (MELI)
Buyer: Alibaba Group Holding Ltd (NYSE:BABA)
Seller: Mercadolibre Inc (NASDAQ:MELI)
It’s hard to believe, but I was once anti-Amazon.com, Inc. (NASDAQ:AMZN). Not so much because I thought it was a bad company, but rather, I too was put off by its inability to make money, especially in the Latin American market where MercadoLibre is so dominant.
MercadoLibre operates an “asset light” model very much like Alibaba, where it merely acts as the middleman and doesn’t own the inventory.
Jack Ma wants to be a global player; buying MercadoLibre gives it access to many of the world’s leading emerging markets. Sure, it’s not the U.S., but it’s a nice chunk of business to control just the same.
Since I picked MELI stock over AMZN back in 2013, MercadoLibre has delivered a very respectable return of 130.3%. However, it’s peanuts compared to the 270.5% return for Amazon over the same period.
In the hands of someone almost as brilliant as Jeff Bezos, MercadoLibre could shine.
After all, it’s the Alibaba of Latin America.
As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.