. this is "nightly business report" brought to you in part by. >> the street.com, featuring stephanie link, she shares her insights with actions alert plus, the multi-million dollar performer she manages with jim cramer. you can learn more at the street.com. here comes ali baba widely expected to be one of the biggest ipos ever, what made eight success in china. >> disney grows past wall street earnings expectations. what's driving the results? what's the one key take away for investors neighborhood, merck makes units, is shedding

assetings a part of the new strategy? all that and more on the nightly business report for tuesday, may 6th. >> good evening, everyone, open sesame, ali baba could be spreading message on wall street. or that's the hope. they filed paperwork with american regulators this afternoon so it can sell its shares here in the u.s. market. they have been often described as china's amazon, ebay and pay pal all rolled into one internet powerhouse. it could be the biggest ipo since facebook went public two years ago. we have more about ali baba. john, i know you have been pouring over these hundreds of pages, what new do we know about this company? how big is it and how might it change the whole internet world now it will be a public company? >> susie, one of the things we know is their ambition is they want to serve china primarily.

a lot of people are wondering, do they want to expan to the u.s.? at least based on what that you see here, they are still focused on china. now the value of the goods sold there, in an enormous marketplace, nearly a quarter trillion dollars worth-of-goods flowed through the platforms. put that into perspective, that's twice as much as amazon, four times as much as ebay. and there is a huge play just in china. if you look at the mobile transactions, the value, say, out of every $4 parkway north of transactions spent on mobile, ali baba gets three. >> that's amazing. >> what do we know anything more about how valuable this company may be? you just gave us some numbers that would indicate that ali baba will be four times as valuable as amazon. >> well, we don't know that. i have a place holder number in here. how much they want to raise. they say a billion dollars. we know that changes overtime. their business model is different from ebay's and

amazons in terms of revenue $6.5 billion revenue into the last fiscal year. that's not a huge amount of revenue. >> that is much smaller than either ebay or amazon. >> and it's because their model is a patient model. they're taking less money off of these transactions, they're touching so many transactions in china and their pitch is, china is not like the u.s. there is not a lot of federal government retail properties. it's happening digitally and we are a huge part of that happening in china. >> real quickly. i know in this prospect us, in this filing. they didn't say what it will be priced at. that's a number, do you have a clue what it might cost to own a piece of ali baba? >> we don't know exactly how they will change that up. >> that will change. it's probably north of $150 billion. the total value of the company once it goes ipo. >> what is that going to do to yahoo? it will boost the value of

yahoo, right? because they got 24% of it. >> it could be well. a lot is priced into yahoo. we figure it will go from here. >> why is ali baba so important? it touts one of the china's most visited marketplaces. they have changed the way chinese consumers buy almost everything. >> reporter: a self-described addict of the online shopping site. nearly everything he buys now is bought on the virtual bizarre of ecommerce giants ali baba. he is on multiple times a week, purchaseing furniture, guitar and today food for his cat. >> it changed my mine. >> reporter: it's a national obsession in china. in a country where could have been seumers mainly save, within they do shop, many log on and browse here. on cow bell which means search for treasure, you can buy an outfit, try it on and hand it back to the delivery man to have

it returned. can you buy something and have it delivered right to your door. millions of these packages are shipped out across the country. >> it can easily describe the style, which is hard to get from the supermarket to shoppers. >> reporter: today this cat food is come sfrk a warehouse across town in by a jenning. this retailer, one of the 7 million used to have a proper pet food store but switched to sales online. >> we have more customers with their online shops. they're all over china. not just limited to beijing, he says. it's good for business he got his cat food in less than a day after paying through ali pay, ali baba's version of ebay's pay pal. buyers and sellers say they hope ali baba builds faith in its site further by cracking down on the sale of fakes. even so, he is using it for all

his needs. despite all that excitement about ali baba. the next guest says the ipo market is going through a recess. kathleen smith, co-founder and chair of an advisory firm. i know you have been saying this is a harsh environment for companies going public. you just heard the news about the ali baba filing. could that company be the exception? how do you think it will do when it goes public this summer? . >> well, we do think that l i baba could certainly break the code we were saying in the ipo mark, which has been a pretty harsh environment where since mid-april the deals that have been priced the last 20, 70% of them have been priced below the range. so issueers have not been treated very well in the current ipo market and you know, there is a lot of investors want to see high growth companies. they want to see profits.

ali baba has profits. so that's going to be an ipo that will be looked alt and of interest to the ipo market. >> do you expect it will buck the trend, in other words, 70% falling below the forecast range? >> we think so. can you look at ali baba and put a mumt pm on their earnings and come up to a valuation of that $150 billion. that will make it a little easier to value. i think almost every portfolio manager will want to own this company, which will be the world's largest ecommerce company. >> you know, back to the overall ipo mark, it was really strong in the couple months of this year the last couple weeks it's gone soft. we have a lot of going public, in fact, a lot are chinese companies as well. how do you think these companies are going to do this week? >> i do think investors are

going to be very selective about these and there will be some pricing pushback, particularly the ones that aren't making money and i do think that there's a focus on the very largest most valuable internet properties. so i do think it may be harder for this large back-up of ipos we are seeing to get done. this is actually a good thing for the ipo market. because we need the ipo market to work for investors and that had been the case all the way through about the first quarter, but the second quarter, it has not been a profitable plates for investors and so the prices have to adjust downward and then investors will make money. that's how it works. that's a good thing. >> what changed and why? >> well, if you look at the overall mark, all the high growth, particularly non-earning high growth tech and biotech health care companies had a reset in their valuations. many of the internet companies are down 20 to 30% from their high itself.

>> that had to affect ipos. they are pleased relative to the already traded companies. so investorsle, they have, there is institutional investors and they need to make, have the logic in where these prices are trading. they just can't trade. trees don't go to the zie. >> give us your quick outlook in half a minute of how you think the ipo market will end the year. 140 ipos so far this year. . well, we have been very optimistic until the last month. we think we can get to above levels of 250 or so. we will go through a slow period. once this adjustment is made, we will see the ipo market come back to more normal level. >> all right, kathleen smith of renaissance capital, thank you for coming on the show. here is something twitter won't be talking about. shares took a tumble. today is the first time that company insiders and early investors were finally aloud to

share sells in the microblogging site. apparently, a lot of them did. shares of twitter tanked falling nearly 18%. they're still higher than november's ipo price of $26 a share. wall street stocks sold off from the opening bell as disappointing earnings from aig and financial shares and sell-off in twitter that susie just mentioned impacted other internet and social media stocks. more on that in a moment t. dow down about 1130 points, nasdaq off 57 and the s&p lower by about 17. after the closing bell, dow component disney delivers the highest quarterly earnings in the company's history. disney did it with people flocking to its theme parks, to escape this winters bitter cold and snow, they are showing the block buster animated movie "frozen" and turning to espn and tv holdings. here's a look at today's number, didny posted earnings after

charges of $1.11 a share, 15 cents more of an liths revenues. they topped $11.5 billion. in after hours trading, disney shares rose as much as 2%. they were down a fraction in the regular session. here is more on the disney results and the key take away for investors. >> megablockbuster "frozen" has been getting all the attention when it comes to disney, nearly $1.2 billion growth in the studio division. but the bigger story is all five of the media and network, parts and resorts, studio consumer products and interactive all grew strongly. each one posted double digit increases in operating income, contributeing to the highest quarterly earnings per share in the history of the company. and that $1.11 share that blue

blew you a way analysts estimates. interactive is now logging a profit, thanks to its disney infinity video games and toys. for "nightly business report," i'm morgan bren fan in los angeles. a wide array in offerings an key acquisitions helped disney make that mouse that roars. the box office and home entertain:theme parks to upside surprises in every quarter over the past year. we took a closer look at what makes disney such a darling for investors. >> reporter: start with "frozen," which disney certainly isn't. it's the highest grossing animated fee cure film ever. the movie crossed the $billion dollar mark in box office in march. just four months after it was released. "frozen" along with "thor, the dark world" has disney skyrocketing. overall box office takes of january, 2013, more than $2 billion.

"thor" is a part of the marvel unit, the hits keep coming. captain america made marvel the most successful successful movie brand of all time, eclipseing harry potter. who is 3rd? disney's "star wars." >> you can say having these under their wing, they have a mount rushmore of movie branch at their disposal. >> reporter: gamers made disney's infinity the highest videogame since it launched last summer. it's done so well, they recently announced marvel's super heroes will be getting together. >> i think this company could be golden in a two or three-year period. it's just going to be a great two or three years for the company. i think the stock has maybe 30, 40% upside over that period. >> reporter: the other pieces of the disney empire have also performed during the past four quarters. theme park attendance, new record. the media networks made more money.

espn is till the single biggest piece of the disney machine, accounting for 30% of the company's total value. the sports network had higher ad revenues and it is still by far the most expensive cable channel for operators to provide to their subscribers. those operators also had to pay higher fees to bring the disney chan toll their customers, making disney, indeed, the mouse that roars. >> for the roster of companies disney has under its umbrella, it looks so strong right now, some analysts say it is positioned for success that could last decades. still ahead, merck heads into a mega-deal. will there be more to come as the drug maker shifts its focus?

. here's what the new interim ceo at target said on his first day on the job, investigators have determined that last year's massive datafest has been limited to what the retailer has already disclosed. 40 million credit and debit card numbers and personal data from 70 million other customers. john morgan, who was thrust into the top spot yesterday when long time ceo greg steinhoffer was ousted also said he's not interested in becoming target's permanent ceo. merck finalized its sale of the consumer health division bayer selling off brand names like claritin and dr. shoals. merck were the biggest decliners

off 2.5%. we spoke with the drug maker about this latest deal and what's next for the company. >> reporter: merck today is announcing it's selling its consumer over the counter health products business to buyers. we talked with the ceo, ken fraser, at analyst day in boston. he told us this is a part of the repositioning of merck's business to focus on an area where it can be a leader and reshaping isn't done and it could potentially see more. >> we are going to look for the best growth opportunities within that portfolio. i wouldn't sigh we are finished. we will continue to create value, that to buy things that will make sense at a value-creating opportunity, to sell things that we don't feel are core and, of course, to keep obvious certain things. >> reporter: he highlighted pipeline opportunities in areas like cancer, hepatitis c, hiv, diabetes and alzheimer's. we also talked about u.s. competent tax policy. this, of course, against the

backdrop of pfizer's offer for astrozenica. it said it will reincorporate. ken fraser telling us today u.s. companies are at a competitive disadvantage when it comes to business development because of the u.s. corporate tax break. >> i sense we need to lower the tax rate. i think we need to have a system that is a territorial system or hybrid system and i think we got to recognize that we're in a global war for assets and business and u.s. companies can't be at this kind of disadvantage. >> ken fraser today also focusing on the company's cancer druchlth it got accelerated at the fda. we should see more data at the end of this month. for "nightly business report," i'm meg terrell in boston. whole foods, we begin with mark focus. the grocer says same store sales rose 4.5%. that trailed estimates. whole foods lowered the

four-year sales forecast, that's after the trend outlooked the past two quarters. shares initially plunged. it was down a fraction in the regular session to $47.95. well, story for electronic art. the videogame maker reported its profit jumped about 14% on better than expected sales of new consols. it also announced plans for a $750 million share buy back. to top it off the company raised its four-year guidance. shares surged after hours up as much as 14% during the regular session, the stock was down 2.5%. groupon reported a quarterly loss. it wasn't as bad as analysts were expecting. revenues came in better than expected. the online deal site issued a light second quarter profit outlook. so shares initially fell after the bell. during the regular session, the stock was off by 2.5% to $6.72. pandora's listening hours were

up 30% in april. the radio company saw its active listeners incress last month. the investors didn't seem impress. shares tumbled 9%. >> office depo closing 1400 of its stores over the next two years as a merger with officemax. it says the close years will save the company $70 million by the end of 2016. the office supply chain posted better than expected quarterlys. shares up 16% today to $4.83. shares of delta took off after the airline announced it will hike its quarterly dividend 50%. they are launching a new stock boy back plan to increase returns for shareholders. the $2 billion boy back will be completed and the stock rose a fraction to 37.69. shares of corinthian colleges plunged. after the company says it is reporting its options and weak

results for the education company, which is struggling. it says it's going to be working with an investment bank and possibly putting itself up for sale. the stock fell more than 9% to a buck eight. the newly emerged fiat krois ler revealed an ambitious plan. the auto maker wants to more than double shares of chrysler and jeep vehicles while building six more jeep assembly plants in six different countries, including china and brazil. it's all aiming for a boost in world wide sales of dodge and fiat cars and targeting explosive sales in alpha romeo sports cars. coming up on the program, a new report concludes climate change is already disrupting our economy and comes ahead of new regulations that could impact certain industries. we have that story next.

. you what makers in washington takening on high frequency trading trying to determine if the u.s. stockmarkets are rig and how regulators can police that high speed trading. a senate panel will hold a hearing on the high speed computer programs and automated systems that critics say gives some traders an edge over average investors. also in washington today, the senate banking committee will vote on a bill to overhaul the u.s. housing finance system next week. the proposal will wind down a bailed out tax bureau owned mortgage giant fannie mae and freddie mac and shifts home loan germany tees for private lenders. the obama administration releasing the latest assess:on

climate change, with inputs from hundreds of scientists, engineers and experts on the impact of global warming. our hampton pearson took a look at how climate change has already affected business and the overall economy. >> reporter: the latest crime assessment says extreme weather caused by climate change is damaging the economy and impacting the lives of americans in every part of the country. in 2012, extreme weather cost the economy $100 become. the lions share $65 billion from hurricane sandy. this past winter, tens of thousands of weather-related flight cancellations cost four major airlines at least half a billion in lost revenue, according to just released earnings report a. three-84 drought is impacting california's $50 billion agriculture economy with more than $800,000 acres of farm land going unplanted. also, the prospect of a food strike and produce prices on the way at the nation's grocery

stores. at the white house, president obama was enlisting the nation weather forecasters as a part of his latest call for action. >> we want to emphasize to the public, this is not a distant problem of the future. this is affecting americans right now. whether it means increased flooding, greater vulnerability to drought. more severe wildfires. >> reporter: environmentalists are praiseing the report. because it pins much of the increase in climate change on huh pan behavior. specifically, emissions that cause grownhouse gases. but conservatives say america can't act alone t. greenhouse gas emissions from the united states are not that large compared to the global groempb greenhouse gas emissions. i think the power plants are a small part of that. and i think that the climate change going into the future is not going to be as dire as it's made out to be. >> reporter: the report rollout

comes just ahead of next month's release of new regulations from the environmental protection agency, limiting carbon emissions from existing coal fired power plants. >> we can do this. this is not about frightening people. it's about facing realities that we face today and taking action to protect our kids in the future. >> reporter: but on capitol hill, senate republicans continue to push for a vote later this week on approval that the keystone oil pipeline as both the job creator and environmentally friendly. >> we need the keystone xl pipeline, which will create tens of thousands of new jobs. it will mean we have a safe source for additional oil in addition to what we produce here in america. >> reporter: it's not just congress that's stalled on the energies policy and climate change. the latest "wall street journal" nbc news poll finds climate change at the bottom of voter's priority lists, withant 40% of those being surveyed saying action can be delayed until

nextier. for "nightly business report," i'm hampton pearson in washington. >> here's a man with quite a story to tell. ben bernanke, the former chairman of the federal reserve. he sealed a book deal. the book currently untitled will be published by ww norton and will tell the story of how he guided the central bank and the economy through the financial crisis. no terms disclosed just yet. the book is scowled to be released next 84. and finelily tonight, a dubious anniversary to note on wall street today. one that introduced a lot of people to high frequency trading and the flaws it exposed in the markets. on this day in 2010, the new york stock exchange became known as the flash crash. the dow suddenly plunged a thousand points late in the trading day losing 9% of its total value in minutes. by the end of that session, stocks recovered most of those losses, the debate of pros and cons of super fast automated

program rages on. >> it was a frightening day. you felt everything was out of control. of course the computers were controlling it. >> the whole fat finger. >> procter & gamble shares down, it was crazy. >> listen tonight. thanks for watching. >> thanks to me as well. i'm tyler mathson. have a great evening, everybody. see you back here tomorrow night.