Investo-lopniks, I summon thee!

"Mr. Ontop, No Strokes, No Smokes...Goes Fast." (twostrokesmoke) 09/25/2013 at 20:26 • Filed to: Not car related

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I'm hearing rumbling on the BBC that Alibaba may go public. I having a little trouble knowing where to find info on this company in English. Do any of you know?

Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney > Mr. Ontop, No Strokes, No Smokes...Goes Fast. 09/25/2013 at 20:31

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http://www.sec.gov/cgi-bin/browse…

Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney > Mr. Ontop, No Strokes, No Smokes...Goes Fast. 09/25/2013 at 20:34

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They're moving from looking at an HK listing to a US IPO, so eventually the appropriate material will pop up at the link I listed (which is the SEC's EDGAR where all US public firms file S-1s, 10Qs, 10Ks and the sort) if they're actually going through with a US IPO.

Mr. Ontop, No Strokes, No Smokes...Goes Fast. > Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney 09/25/2013 at 20:37

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Cool. Thank you. All I know about them is from my travels in Asia, meaning, i knwo what they do, but that's it. Any insight from your side of things?

Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney > Mr. Ontop, No Strokes, No Smokes...Goes Fast. 09/25/2013 at 20:58

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I try not to say much about these things to random people on the internet (not to be disparaging towards you) for both professional and personal reasons, but I'll give a brief take:

They're going to be a big IPO, they're in an emerging/growth market, and the market is probably going to be foaming at the mouth to get a chunk. The downside is that non-institutional buyers won't get anywhere near the IPO, so hopping on shortly thereafter is the only hope. There should be plenty of volume, though.

Their revenue has skyrocketed in the past year or two, which is great, but we'll have to see if they maintain the growth.

Also, not having seen their financials, don't really know much else other than what Yahoo (big stakeholder currently) has said about their profitability, and that's what's really holding me back from making any kind of meaningful commentary. I'll be running my own valuation once audited financials become available and see where we go from there.

Mr. Ontop, No Strokes, No Smokes...Goes Fast. > Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney 09/25/2013 at 21:05

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Fair enough. I'm as random as it gets. My main concern is, if they are listing in our market, they will need to demonstrate growth in this market. Even though they are huge elsewhere, if they don't catch on over here, it could have a negative affect on the company's overall performance.

Also, being a Chinese company, I would hope that there would be a way to get real transparency in the financial statements rather than tailor made statements to make investors happy. (My nice way of saying corruption is always a concern)

Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney > Mr. Ontop, No Strokes, No Smokes...Goes Fast. 09/25/2013 at 22:18

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As far as your first concern, I'm not so sure that they have to make inroads here just because they're listed on a US exchange; returns are returns, regardless of where your equity is traded. What they do need to do is continue to do what they're doing in China and expand it to emerging markets. Hell, they can be wildly profitable and huge just by growing in China alone. I don't think making huge inroads in the US is really a fair expectation.

As to the second concern, SEC regulations pretty much cover that. The Big 4 accounting firms all have significant presences in China, and given Alibaba's size, I would presume that one of them is probably already auditing their financials or will be. The SEC doesn't really make a habit of letting anyone but the largest 4-6 firms audit public companies, and for foreign firms listed on a US exchange the scrutiny can be even higher. There's much to be debated about how the audit function works in the US, but it does, and I wouldn't be particularly worried about the quality of their financials.

Mr. Ontop, No Strokes, No Smokes...Goes Fast. > Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney 09/26/2013 at 00:07

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Good points...and that why you do that for a living, an I sit here asking dumb questions I suppose!

Bob Loblaw Made Me Make a Phoney Phone Call to Edward Rooney > Mr. Ontop, No Strokes, No Smokes...Goes Fast. 09/26/2013 at 00:12

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haha! Dumb questions they are not, I've wasted a lot of perfectly good time learning mundane shit like this!