(I told you so!) 1001 Chinese-Arabian Nights... Er Alibaba IPO
Below is my original post from three years ago regarding the Alibaba IPO. EAT THAT! It now trades at $186/share and a market cap of half a trillion... yes TR...TRILLION dollars. And a very successful singles day 2017!
Archive from 9/13/2014
Across the internet, investors have begun to salivate over the prospects of the Alibaba IPO. I as well have been patiently awaiting the news since Jack Ma stepped down as CEO in preparations of the company's listing.
Even before the excitement around the company's business model, I experienced the rise of Tao Bao, China's home grown Amazon.com. I relied heavily on it's overnight delivery of a variety of goods from anywhere across the nation at my fast-paced-wait-for-no-one job in Shanghai. From mini scooters to tennis skirts and more, whatever I wanted I could have shipped or personally delivered to my door at a nominal fee. I think the most distinguishing feature of Tao Bao is that customers can literally 讨价还价 (taojiahuanjia - haggle) in the virtual world real time. This was especially beneficial as a foreigner since the shop keeper would only be able to tell that I was not Chinese by my inability to type Chinese grammar correctly. (English too for that matter..) In which case I got the standard: Are you from HuBei 湖北? That's a running joke about my Chinese speaking ability for another time..
Anyways. More than just the glory of Tao Bao, imagine Alibaba as Amazon, Ebay, Gilt, Paypal, iCloud, WhatsApp, and Yahoo Search all rolled into one. (For some reason I thought there was also a facet of youtube, but apparently they only own a share of Youku Tudou - China's Youtube that competes with Baidu's video provider Qiyi) These assets to me screams power house, pending the companies ability to win the hearts and trust of Americans and other online shoppers outside of the Middle Kingdom. A 30% stake owned by Yahoo adds validity to this groups claim on the future of e-commerce.
Unfortunately for Alibaba, it's services aren't exactly a household name among investors in the United States. Or at least claims the Wall Street Journal (here). Complicated further by the mistrust of U.S. listed Chinese companies due to overzealous due diligence firm's like Carson Block's Muddy Waters Research and it will be interesting to see if Alibaba earns the cool $24 Billion it seeks.
But hey, at the end of the day I think its a worth-the-risk stock at a projected $60-$66/IPO Share that will appreciate slowly much like the other Chinese tech contender Baidu. I'd say the only difference is that I've never drank with Alibaba's leadership team so I don't know if their as much fun as Baidu.