Alibaba’s shares soared to $93.89 at closing Friday, 38 percent
higher than the company’s initial stock price. Over the weekend, it looks confirmed that the greenshoe was exercised and that this was indeed the largest IPO in the world, now valuing the company similar to Wal-Mart.
What a fascinating meeting of east and west through the business of the internet. Inside Alibaba’s Lavish IPO After-Party — Video! Audio! Photos! Shrimp! | Re/code: "Jack Ma was clearly the star of the show, descending from the stage after his welcome speech only to be surrounded by a gaggle of suits that gave the scene more of a feel of a Wall Street soiree than a tech gathering"
For those willing to read in the full the 300+ page prospectus, there is plenty to warn the investor, especially around their governance structure. The Washington Post article cited below summarizes well the main areas of concern. In particular the actions around Alipay, and China Logistics, locating significant value and power outside of the main company, are real evidence for the wary investor. But, for now, there are not many of those, and the great majority have a far greater fear of missing out.
Besides, perhaps this is a positive progression of globalized partnerhsip between east and west, as China continues to develop its economic muscles. “Trust us. Trust us the market, trust the young people, trust the new technology. The world is getting more transparent. Everything you worried about, I’ve been worried about for the past 15 years,” Ma told CNBC on the floor of the NYSE. “When you trust, everything is simple. If you don’t trust, everything gets complicated.”
What a fascinating meeting of east and west through the business of the internet. Inside Alibaba’s Lavish IPO After-Party — Video! Audio! Photos! Shrimp! | Re/code: "Jack Ma was clearly the star of the show, descending from the stage after his welcome speech only to be surrounded by a gaggle of suits that gave the scene more of a feel of a Wall Street soiree than a tech gathering"
For those willing to read in the full the 300+ page prospectus, there is plenty to warn the investor, especially around their governance structure. The Washington Post article cited below summarizes well the main areas of concern. In particular the actions around Alipay, and China Logistics, locating significant value and power outside of the main company, are real evidence for the wary investor. But, for now, there are not many of those, and the great majority have a far greater fear of missing out.
Besides, perhaps this is a positive progression of globalized partnerhsip between east and west, as China continues to develop its economic muscles. “Trust us. Trust us the market, trust the young people, trust the new technology. The world is getting more transparent. Everything you worried about, I’ve been worried about for the past 15 years,” Ma told CNBC on the floor of the NYSE. “When you trust, everything is simple. If you don’t trust, everything gets complicated.”
Meanwhile, in the US itself, the focus sharpens on Yahoo, and Marissa Mayer, now that the most significant part of its valuation is priced to market. Friday's pundits were already waving the activist angle to keep the coverage momentum going
With Alibaba windfall, all eyes on Yahoo's Mayer - CNET: The IPO promises to be one of the biggest events in Yahoo's recent history. But after the expected multibillion-dollar windfall, the company's going to be under intense pressure to improve performance.
All the irresponsible things Marissa Mayer could do with Yahoo’s Alibaba IPO windfall - Quartz
Also, see my earlier post, Yahoo - turning around or just a shell for Alibaba? | A Longer View
Washington Post article:
The red flags around Alibaba and one of the biggest stock debuts in history - The Washington Post: It’s not just that shareholders won’t have an influential ownership stake in Alibaba. They won’t even really have ownership. Investors aren’t really buying shares in Alibaba, they’re buying shares in a Cayman Islands-based “variable interest entity,” a kind of shell company Chinese firms use to get around the country’s strict rules on foreign ownership...
One of Alibaba’s biggest snags centered around Alipay, its
fast-growing payment service, which Ma split from the rest of the company in 2011
and moved to a firm that he controlled. Done without board approval, the move
enraged two of Alibaba’s biggest investors, Web giant Yahoo and Japanese
telecom powerhouse SoftBank...The three firms later negotiated a settlement, but analysts said their trust was weakened. Analysts at Morningstar, which liked a lot about Alibaba’s performance, nonetheless said the firm had “high uncertainty and poor stewardship.”
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