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Jacques, Shakespeare would call that "damning with faint praise." It does seem to me that Alibaba has an actual underlying business with real business value, bu
by tokenadult 13y ago
Jacques, Shakespeare would call that "damning with faint praise." It does seem to me that Alibaba has an actual underlying business with real business value, but I wonder about the transparency, even with listing in the United States, of a company that does most of its business in China. We shall see what value the market sets on the company at first, and how that works out over time.
- tanzam75 13y agoActually, the Alibaba that is being listed does not have an underlying business. The stock represents ownership of a Cayman Islands variable interest entity that has a contractual claim on the actual Alibaba's profits. This is not a new trick. It's a longstanding loophole in the Chinese law barring foreign ownership of certain companies. But it's also not exactly risk-free: http://dealbook.nytimes.com/2014/05/06/i-p-o-revives-debate-over-a-chinese-structure http://dealbook.nytimes.com/2014/05/06/i-p-o-revives-debate-...
- rahimnathwani 13y agoDan Harris wrote some interesting articles about the VIE structures (aka Sina structure). If you're interested, a good place to start is here: http://www.chinalawblog.com/2013/06/buying-into-a-china-vie-what-me-worry.html http://www.chinalawblog.com/2013/06/buying-into-a-china-vie-...