Alibaba

[CityFarmer]

More words exchange between Mr. Ma and Executives from HK Exchange...

Alibaba execs state case after Hong Kong IPO talks collapse

HONG KONG — The spat between Alibaba Group and the Hong Kong stock exchange has blown up in public as executives take to blog posts to state their case after China’s largest e-commerce company ended talks for an initial public offering (IPO) in the city.

Mr Joseph Tsai, Executive-Vice Chairman of Hangzhou-based Alibaba, said the bourse had failed to adapt to trends and changes, while Mr Charles Li, Chief Executive of Hong Kong Exchanges and Clearing, recounted a recent dream involving four characters that underlined to him the need to put the public interest first.

The bourse would not accept Alibaba’s proposal for its partnership, which includes members of senior management, to control a majority of board nominations after a listing.

Hong Kong also prohibits IPO with different classes of shares, a structure that has been used by companies in the United States, including social networking giant Facebook, to keep founders in control.

Disappointed over the Hong Kong exchange’s intransigence, Mr Tsai wrote yesterday: “We are deeply aware of the disruption that is brought about by the Internet across all industries, and the capital markets are not exempt from this disruption ... The question Hong Kong must address is whether it is ready to look forward as the rest of the world passes it by … As a company with most of our business in China, it was natural for Hong Kong to be our first choice.”

Mr Tsai said Alibaba never proposed a dual-class structure, but a partnership arrangement that will protect the company’s long-term interests. He said the structure will prevent the company from deteriorating after the founders leave and will enable the board to formulate strategy “without being influenced by the fluctuating attitudes of the capital markets”.

Japan’s SoftBank, Alibaba’s biggest shareholder with a stake of about 37 per cent, has backed the partnership structure as integral to the success of the e-commerce company.

Alibaba, founded by former English teacher Jack Ma, is valued by investment bankers at well over US$100 billion (S$126 billion), roughly the same as Facebook. It could have raised about HK$100 billion (S$16.2 billion) in an initial sale, according to Ernst & Young. Alibaba is now seeking a listing in New York instead, people familiar with the matter said this week.

While losing the Alibaba IPO is a blow to Hong Kong, which has not hosted a first-time share sale of more than US$4 billion since October 2010, Mr Li said the decision must be considered objectively. He recalled his dream with four characters whom he dubbed Mr Innovation, Mr Disclosure, Mr Solution and Mr Big Investor.

“In real life, there isn’t a Mr Solution who can put the right decision together for us,” Mr Li wrote on his personal blog yesterday.

“In the end, we should take responsibility for doing what is right and best for Hong Kong, not just what is safe and easy.” AGENCIES
http://www.todayonline.com/business/alib...collapse-0

[sgd]

then they should list in SGX instead haha
dunno why they have to go to US

just imagine we have a 100billion dollar company listed on sgx, on a bad trading day if they take a 0.5% hit it will likely drag the whole index down with it.

[d.o.g.]

Japan’s SoftBank, Alibaba’s biggest shareholder with a stake of about 37 per cent, has backed the partnership structure as integral to the success of the e-commerce company.

Actually the big shareholders of Alibaba can easily solve this on their own - by giving the management their proxy votes. Softbank + the founders would already reach 47%, it would be almost impossible to unseat them.

Warren Buffett did exactly this when he assigned Berkshire's votes in Coca-Cola to the management.

So, all the noise is much ado about nothing.

As usual, YMMV.

[lonewolf]

A related commentary from Investor Central:

Dear Mr Bernie Ecclestone

I wouldn't be so ungracious as to suggest the Formula 1 should not be staged in Singapore due to the inconvenience of road closures. Afterall, the F1 is an exciting event which beams images of our fair city's skyline into the homes of millions of would-be visitors who might spend their tourist dollars here. Each year, an extra S$150 mln apparently already flows our way in incremental tourism receipts.

But, Mr Ecclestone, if you really are going to list your Formula 1 Group on the Singapore Exchange as you said you would, I hope you won't ask the CEO Mr Bocker to change the listing rules for you.

Not that you are. It's just that we're a little tired of companies trying to tell regulators how to regulate.

Race teams can modify their cars however they want, as long as it's not against the rules - and pre-emptively, we'd appreciate it if you let the same principle apply to your listing on the SGX.

First Manchester United, now Alibaba is planning a listing in the United States because an Asian stock exchange wouldn't accede to their request to change listing rules - and I say, bravo to the exchanges.

Alibaba has its nose out of joint because Hong Kong Exchanges and Clearing wouldn't agree to let it list with a partnership structure, which would see the majority of directors nominated by a small group of insiders who control just about 10% of the company.

It reminds me of Manchester United's snubbing of the Singapore Exchange, because they turned down their request to allow different classes of shares, with similar effect.

The HKSE might have annoyed the city's investment bankers by failing to grant Alibaba an exception to listing rules.

But that's okay.

Investment bankers don't have regulatory functions, investment bankers don't have an obligation to all investors in the way exchanges do, and investment bankers are not as concerned with the long-term development of the capital markets as they are with their current year's bonuses.

If you want proof of that, just count the number of Ferraris, Lamborghinis, Porsches and other overpowered sports cars that pull into the carpark at Marina Bay Financial Centre every morning.

Let Alibaba join Manchester United on a US exchange. There they are subject to much tougher regulations in the form of the Sarbanes-Oxley Act - a cumbersome tool designed to curb the excesses of investment bankers there (Collateralised Debt Obligations or Mini-Bonds, anyone?).

My message to you, therefore, Mr Ecclestone: We don't mind the road closures. And we would be delighted if you listed Formula One Group on the Singapore Exchange. But on the exchange's terms.

Best wishes
Mark Laudi
Execuive Editor
Investor Central

[Dividend Warrior]

then they should list in SGX instead haha
dunno why they have to go to US

just imagine we have a 100billion dollar company listed on sgx, on a bad trading day if they take a 0.5% hit it will likely drag the whole index down with it.

That is pretty scary!

[corydorus]

If SGX would have say "NO" to many of the S-Chips with tighter regulations the Public would not have wasted Billions. Integrity of exchange management is critical to protecting unscrupulous bankers for their Bonuses and Companies who has ulterior motives. I still remember how HK forced the Banks to compensate investors for losses in Structured Bonds. Time and again HK has shown their ability to do the Right Thing while some other people just walkaway from their responsibility totally.

[CityFarmer]

Japan’s SoftBank, Alibaba’s biggest shareholder with a stake of about 37 per cent, has backed the partnership structure as integral to the success of the e-commerce company.

Actually the big shareholders of Alibaba can easily solve this on their own - by giving the management their proxy votes. Softbank + the founders would already reach 47%, it would be almost impossible to unseat them.

Warren Buffett did exactly this when he assigned Berkshire's votes in Coca-Cola to the management.

So, all the noise is much ado about nothing.

As usual, YMMV.

The intention is to have absolute control, rather than rely on specific SSH support, which is revocable.

Mr. Ma's intention is well understood, but it isn't a fair arrangement to all shareholders.

[CityFarmer]

An initiative from Alibaba which shouldn't be ignored if vested in China. I am actively monitoring it, since the day Mr. Ma announced his master plan...

Alibaba aims to revolutionise China’s ‘e-conomy’

HANGZHOU (China) — Alibaba’s plans to revolutionise China’s retail industry, investing US$16 billion (S$20 billion) in logistics and support by 2020, will open up China’s vast interior and bring access to hundreds of millions of potential new customers.

With an extra US$15 billion or so in its pocket from a likely Initial Public Offering, partners such as delivery service firms and life insurers will pump cash into revamping China’s fragile supply chains and big new data centres to process reams of consumer information.

While Alibaba sees itself as a catalyst for change, its plans also lay the groundwork for retail rivals to chip away at its business further down the line. By encouraging retailers to be more Internet-savvy, and by building the networks to distribute goods nationwide, Alibaba is showing bricks and mortar rivals how to grow online without depending on its sites.
...
http://www.todayonline.com/business/alib...s-e-conomy

[opmi]

Proxy to play Alibaba is Yahoo!

[CityFarmer]

Alibaba invests S$455 mln in appliance maker’s “big goods” logistics

HONG KONG/BEIJING – Alibaba Group will invest HK$2.82 billion (S$455 million) in appliance maker Haier Electronics Group in a deal aimed at expanding the Chinese e-commerce giant’s logistics reach to the millions of consumers in China’s vast interior.

Online retail is booming in China and market leader Alibaba is seeking to develop Haier’s distribution network for large-sized goods into a logistics platform that will reach lesser developed cities and which other companies can also use.

For Haier, the partnership with China’s biggest e-commerce firm will further its expansion into online retail and logistics, a strategy aimed at giving it an edge in the fierce battle for margins in the world’s biggest appliance market.

Shares in Haier, in which KKR-backed Qingdao Haier owns a 47.8 per cent stake, soared 20 per cent to their highest in nearly 14 years after the deal was announced. The stock closed up 13 per cent on Monday, outpacing a 0.3 per cent gain in the benchmark Hang Seng Index.
...
http://www.todayonline.com/business/alib...-logistics