Stocks

Alibaba

Posted on September 20th, 2014 · Stocks

* Alibaba.

Yesterday, Alibaba -China’s largest online commerce site went public on the New York Stock Exchange under symbol BABA.

Jeff Eats just happened to catch CNBC’s interview with Alibaba’s CEO moments after the stock opened for trading. You would have sworn from the tone of the interview that Jim Cramer and his buddies had just witnessed the Second Coming Of Christ. Ridiculous- these guys are suppose to be reporters not groupies!

Jeff Eats has never ever seen a Chinese person eating in a kosher deli- nor for that matter, a Chinese company with “books” that were 100% legit.

Time will tell…

By the way, BABA closed just under $94 on its first trading day!

9 Comments to “Alibaba”

  1. LODI says...

    Jeff
    I saw the same interview.
    Cramer and his pals were fawning all over this CEO.
    No question the CEO is now one of the richest in the world, but although he speaks English he didn’t say one thing that made any sense to my ears. From what I heard BABA is here to help grow small businesses. The guy sounded like a preacher and a prophet and not a CEO.
    I’m with you, Chinese companies are notorious for phony bookkeeping.
    BABA?

  2. Streeter says...

    Jeff
    Our hedge fund got stock in the ipo. We made almost 30 bucks a share trading out. We play the game but we don’t trust Chinese financials so we don’t and won’t hold stocks like this other than for a quick in and out trade.

  3. ZED says...

    NY Post agrees

    Chinese e-commerce giant Alibaba is about to launch what may prove the biggest initial public stock offering ever. Yet anyone who expects to get rich from buying into China’s high-growth story will be betting against history.
    China’s explosive economic rise has delivered virtually nothing to most stock investors. When Chinese companies have listed stocks on American markets, their shares have lost an average 1 percent a year for the next three years, compared with an average 7 percent annual gain for other US IPOs, according to research by Jay Ritter, a finance professor at the University of Florida.
    Most Chinese stocks trade in China, of course. And those stocks have burned investors, too. From 1993 to 2013, when China’s economy grew nearly seven-fold from No. 9 to No. 2 in the world, stocks on Chinese markets returned a cumulative total of just 7.9 percent — even if shareholders had reinvested dividends.
    “It’s probably one of the biggest disconnects in the history of stock markets,” says Nicholas Lardy, senior fellow at the Peterson Institute for International Economics.
    It’s entirely possible, of course, that Alibaba will produce outsize investment returns over time. The company has become a hugely popular shopping magnet on the strength of China’s surging growth.
    The company’s financial results have been stellar: Alibaba said its revenue jumped 46 percent to $2.54 billion in the three months that ended June 30 and that it earned $1.2 billion excluding a one-time gain.
    Potential investors have swarmed to Alibaba’s presentations in advance of the initial offering. Demand has grown so feverish that Alibaba on Monday said it planned to raise the offering price from the $60 to $66 a share it had earlier set to $66 to $68.
    Yet the track record for Chinese stocks in general doesn’t inspire confidence. Investment returns have been depressed by a range of factors — from allegations of corporate fraud to questionable accounting to maddeningly cumbersome government rules.
    “China has the most stable economy but the riskiest stock markets,” Guoping Li of Beijing’s Central University of Finance and Economics wrote last year. Li says Chinese stocks have become known as “the butchers of small shareholders’ wealth.”
    And Ritter’s figures for Chinese stocks in America don’t include the riskiest ones — those that have made a back-door entry onto US exchanges by merging with US shell companies and thereby eluding much of the regulatory scrutiny that usually comes from selling shares publicly for the first time.
    More than 100 of these companies were suspended or kicked off US exchanges in 2011 and 2012. The Securities and Exchange Commission has charged about two dozen with civil accounting violations and fraud. In one 2012 case, the SEC accused two executives of Puda Coal Inc. of transferring its most valuable assets to themselves and leaving investors with a worthless shell company.
    ‘CHINA IS TO STOCK FRAUD WHAT SILICON VALLEY IS TO TECHNOLOGY’
    – Carson Block, Muddy Waters Research
    “China is to stock fraud what Silicon Valley is to technology,” says Carson Block, who runs the investment firm Muddy Waters Research and has profited by betting against Chinese companies.
    Not all Chinese stocks fare poorly, of course. The Internet search firm Baidu, for example, has surged since it listed on Nasdaq in 2005; its shares are up 48 percent in the past 12 months.
    But the reputation for questionable accounting and dodgy business practices can tarnish even the soundest Chinese companies.

  4. Anthony Franza says...

    At 94 this is a suckers bet.
    You look at the CEO and you know he’s a con man.

  5. KSR says...

    Fraudulent Financials.

  6. Shelly H says...

    So how many of you tried to get in on the IPO and couldn’t?

  7. jessejames says...

    just checked baba is currently 87.62.

  8. jessejames says...

    Just checked stock is currently $78.45

  9. jessejames says...

    Stock is now $66.72.
    Chinese Market is imploding.
    Total collapse.
    Claims all over tv how tthat books of Chinese companies can’t be verified.
    Jeff, you called BABA and the whole Chinese market right on the nose.

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