Author Topic: Alibaba...Anyone buy any?  (Read 6582 times)

Bikesy

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Alibaba...Anyone buy any?
« on: September 19, 2014, 12:50:06 PM »
Just curious if any Mustachians jumped on the IPO train!

ivyhedge

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Re: Alibaba...Anyone buy any?
« Reply #1 on: September 19, 2014, 01:05:56 PM »
Absolutely!

Mother Fussbudget

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Re: Alibaba...Anyone buy any?
« Reply #2 on: September 19, 2014, 02:02:02 PM »
I'm waiting - within about 3 weeks, the stock price settles out once the IPO hype is off., then I'll investigate it seriously. 
I did this with Facebook - waited until the price came down to it's original IPO price, and bought.  Twitter didn't stay down for long, but it was a similar story.

At $66-68 BABA sounded reasonable, but it opened at $94, drifted around $90 mid-day, and is closing around $93.
I'm waiting.

TrulyStashin

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Re: Alibaba...Anyone buy any?
« Reply #3 on: September 19, 2014, 02:02:13 PM »
Buyers do not own stock in Alibaba.  They own stock in a Cayman Islands holding company to which Alibaba is supposed to make payments.  If Alibaba doesn't make the payments, then shareholders of the holding company have to first sue to take over that corporation and then direct that corporation to sue Alibaba, in China, for the profits it was supposed to have paid but didn't. 

Not kidding.  I wouldn't touch this stock with a 10-foot pole.  But that's just me.

http://www.npr.org/2014/09/12/348010275/when-investors-buy-alibaba-shares-they-wont-get-what-they-paid-for

ioseftavi

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Re: Alibaba...Anyone buy any?
« Reply #4 on: September 19, 2014, 02:59:28 PM »
Buyers do not own stock in Alibaba.  They own stock in a Cayman Islands holding company to which Alibaba is supposed to make payments.  If Alibaba doesn't make the payments, then shareholders of the holding company have to first sue to take over that corporation and then direct that corporation to sue Alibaba, in China, for the profits it was supposed to have paid but didn't. 

Not kidding.  I wouldn't touch this stock with a 10-foot pole.  But that's just me.

http://www.npr.org/2014/09/12/348010275/when-investors-buy-alibaba-shares-they-wont-get-what-they-paid-for

This times a million.  If you're going to pick individual stocks - and you know how badly the odds are stacked against you but want to do it anyhow - picking stocks with terrible ownership / legal structure that invite corporate governance abuses seems like a bad idea.  Buying them at the time of the IPO - literally when the stock will be at its MOST expensive because equity markets are doing well and the company has had 3-5 years of great results - seems like stacking the deck against yourself even moreso. 

I'm with Truly Stashin', I'll take a pass.

TrulyStashin

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Re: Alibaba...Anyone buy any?
« Reply #5 on: September 19, 2014, 03:18:32 PM »
IMHO, from now on, the irrationality of the market can be simply dubbed "Alibaba."

As is "Wow, Janet Yellen sneezed and the market went all Alibaba."

Bikesy

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Re: Alibaba...Anyone buy any?
« Reply #6 on: September 19, 2014, 05:58:22 PM »

At $66-68 BABA sounded reasonable, but it opened at $94, drifted around $90 mid-day, and is closing around $93.
I'm waiting.

I was curious about the pricing.  Did anyone get to purchase the stock in the $60s or were the first open market shares sold at $94?

Left

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Re: Alibaba...Anyone buy any?
« Reply #7 on: September 19, 2014, 06:31:10 PM »
I just don't see how it'll do better than it was before as a private company...
Stockholders don't get actual say in how company is ran
The US market didn't grow because it listed, nothing's changed on it and they can't make more profit by doing something they aren't already doing. They are a large wholesale company from china. It isn't like Amazon where they can advertize for more consumers because individual consumers don't want to buy wholesale items in bundles of 10-100s

there's a sister site to buy individual items but still, I rather have Amazon's protection over one provided by Chinese company (I have no problems buying from china, but if I want any buyer protections, I don't look there for it)

Rob

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Re: Alibaba...Anyone buy any?
« Reply #8 on: September 19, 2014, 06:37:10 PM »
I would have tried to get some of the IPO to sell quickly, but I don't have the capital to be able to do that yet (at least through Fidelity, don't know if other options would have been feasible). Not really interested at this point.

surfhb

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Re: Alibaba...Anyone buy any?
« Reply #9 on: September 19, 2014, 07:40:04 PM »
I thought gambling was anti mustachian   LOL

Davids

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Re: Alibaba...Anyone buy any?
« Reply #10 on: September 19, 2014, 08:01:18 PM »
I might jump if it falls to under $80

TomTX

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Re: Alibaba...Anyone buy any?
« Reply #11 on: September 20, 2014, 05:33:59 AM »

At $66-68 BABA sounded reasonable, but it opened at $94, drifted around $90 mid-day, and is closing around $93.
I'm waiting.

I was curious about the pricing.  Did anyone get to purchase the stock in the $60s or were the first open market shares sold at $94?

Yeah, typically the investment banks who set up the IPO and their rich friends get it at a significant discount. Then they sell it at the IPO.

What an archaic system.

ch12

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Re: Alibaba...Anyone buy any?
« Reply #12 on: September 20, 2014, 06:46:59 AM »
Buyers do not own stock in Alibaba.  They own stock in a Cayman Islands holding company to which Alibaba is supposed to make payments.  If Alibaba doesn't make the payments, then shareholders of the holding company have to first sue to take over that corporation and then direct that corporation to sue Alibaba, in China, for the profits it was supposed to have paid but didn't. 

Not kidding.  I wouldn't touch this stock with a 10-foot pole.  But that's just me.

http://www.npr.org/2014/09/12/348010275/when-investors-buy-alibaba-shares-they-wont-get-what-they-paid-for

This times a million.  If you're going to pick individual stocks - and you know how badly the odds are stacked against you but want to do it anyhow - picking stocks with terrible ownership / legal structure that invite corporate governance abuses seems like a bad idea.  Buying them at the time of the IPO - literally when the stock will be at its MOST expensive because equity markets are doing well and the company has had 3-5 years of great results - seems like stacking the deck against yourself even moreso. 

I'm with Truly Stashin', I'll take a pass.

Also passing. Chinese companies who trade on the NYSE have been historically marked by accounting scandals (or else I would've already invested in Renren). I studied abroad at the Guanghua School of Management in Beijing, and I think it's because people will publicly say something while privately the numbers are not the same. The relatively recent case of Caterpillar in China:
http://www.businessinsider.com/how-caterpillar-got-bulldozed-in-china-2014-1

wealthviahealth

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Re: Alibaba...Anyone buy any?
« Reply #13 on: September 21, 2014, 07:10:09 AM »
I have been considering the safer option and buying some positions in Yahoo.

KBecks2

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Re: Alibaba...Anyone buy any?
« Reply #14 on: September 21, 2014, 12:26:30 PM »
I am interested in Alibaba as a speculative position in my portfolio, for maybe 0.5% - 1%.  I would like to buy on a dip.  I would consider writing puts on it, but I don't know how options will work on a new IPO, or when they will be made available.

rmendpara

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Re: Alibaba...Anyone buy any?
« Reply #15 on: September 21, 2014, 12:44:53 PM »
Good company with potentially great prospects for the future within the Chinese market, but mega cap Chinese companies are somewhat unproven... at least in the services industry(ies).

Oil/natural resources are a bit easier to understand... while tech, not so much (in foreign markets).

If nothing else, just add a "risk premium" of 100-200 bp to your calculation, or even just in your head. For me, I hope for 7-10% on average from US equities... I would require a greater return for foreign equities... perhaps 8-11%? And then for Chinese equities... more like 9-12%.

Pick a number that suits you, but don't blindly jump in. A good company isn't always a good investment, and vice versa.

jmusic

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Re: Alibaba...Anyone buy any?
« Reply #16 on: September 22, 2014, 03:56:57 PM »
IMHO, from now on, the irrationality of the market can be simply dubbed "Alibaba."

As is "Wow, Janet Yellen sneezed and the market went all Alibaba."

Dictator reference?

When the market is bullish, we'll say it's "Alibaba."  When the market goes down, we'll say that it's "Alibaba." 

hodedofome

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Re: Alibaba...Anyone buy any?
« Reply #17 on: September 23, 2014, 11:22:14 AM »
If you aren't able to get in at the IPO price, I'd never buy a stock on the first day of trading. For every GOOGL there's 10 or more stocks that do what FB did. You don't want to be the bag holder while all the insiders are selling to you and enjoying the good life at your expense. Wait and see if it at least trades above the highs of the IPO day. That'll at least give you a signal that there's some buying pressure in there. If it's nothing but sellers...stay far, far away.