Author Topic: BABA - Alibaba  (Read 63050 times)

cmlber

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Re: BABA - Alibaba
« Reply #190 on: September 18, 2018, 05:01:55 PM »
Its possible to do due-diligence it just takes a ridiculous amount of time to get to the bottom of anything they own. I just have to assume that none of the hedge funds that own this have done any kind of work or have read a single line from an Alibaba annual report. Take for example their Best Inc. holdings, its held in Hangzhou Ali Venture Capital Co., Ltd which is owned 80% by Ma and 20% by Simon, not by the listco. They pledged their equity in the firm to one of the WFOE's so Hangzhou Ali Venture Capital Co is thus consolidated in the BABA annual report. That's not even disclosed in the BABA annual report, I ended up finding it in the Best Inc. reports.

Where are you seeing this in the Best annual report?  Under the Share Ownership footnotes the Best 20-F says Alibaba's stake is owned by Alibaba Investment Limited, which is wholly owned Alibaba Group Holding Limited, the ListCo...

The stock is a shell co., most of the business is run through its VIE.
https://www.qichacha.com/firm_ca73e5d4965cdf0c9c66938e38a3866c.html

Isn't this the case for all Chinese listed technology companies?  They all have the VIE structure, what's the difference?  Alibaba the ListCo owns Alibaba Investment Limited which owns shares in BSTI on the Nasdaq which are worth $500MM, so are you saying the public shareholders in BSTI own absolutely nothing but are paying $2.3Bn for it?
Welcome to Chinese ADR's you own an offshore shell company with contractual obligations not the actual Chinese operating assets.
You can thank Enron for changing how VIE's are consolidated as well.

Yes, but your original post implied BABA was trying to dupe the public markets through lack of disclosure that BABA owns 22% of Best Inc when really Jack Ma owns it.  There's no lack of disclosure, every investor in Chinese ADRs knows there is a VIE structure... 

The VIE structure is obviously a risk-factor, but your particular example of difficulty to understand BABA seems off, since a) in a paragraph or two we've determined pretty easily that BABA does in fact own 22% of BSTI but the VIE is controlled by a Ma entity... tomorrow BABA could sell it's BSTI stock and have $500MM in cash though... and b) this is so immaterial to the value of BABA that it's irrelevant.  (Note, I don't own BABA)


Cameron

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Re: BABA - Alibaba
« Reply #191 on: September 18, 2018, 05:06:19 PM »
Its possible to do due-diligence it just takes a ridiculous amount of time to get to the bottom of anything they own. I just have to assume that none of the hedge funds that own this have done any kind of work or have read a single line from an Alibaba annual report. Take for example their Best Inc. holdings, its held in Hangzhou Ali Venture Capital Co., Ltd which is owned 80% by Ma and 20% by Simon, not by the listco. They pledged their equity in the firm to one of the WFOE's so Hangzhou Ali Venture Capital Co is thus consolidated in the BABA annual report. That's not even disclosed in the BABA annual report, I ended up finding it in the Best Inc. reports.

Where are you seeing this in the Best annual report?  Under the Share Ownership footnotes the Best 20-F says Alibaba's stake is owned by Alibaba Investment Limited, which is wholly owned Alibaba Group Holding Limited, the ListCo...

The stock is a shell co., most of the business is run through its VIE.
https://www.qichacha.com/firm_ca73e5d4965cdf0c9c66938e38a3866c.html

Isn't this the case for all Chinese listed technology companies?  They all have the VIE structure, what's the difference?  Alibaba the ListCo owns Alibaba Investment Limited which owns shares in BSTI on the Nasdaq which are worth $500MM, so are you saying the public shareholders in BSTI own absolutely nothing but are paying $2.3Bn for it?
Welcome to Chinese ADR's you own an offshore shell company with contractual obligations not the actual Chinese operating assets.
You can thank Enron for changing how VIE's are consolidated as well.

Yes, but your original post implied BABA was trying to dupe the public markets through lack of disclosure that BABA owns 22% of Best Inc when really Jack Ma owns it.  There's no lack of disclosure, every investor in Chinese ADRs knows there is a VIE structure... 

The VIE structure is obviously a risk-factor, but your particular example of difficulty to understand BABA seems off, since a) in a paragraph or two we've determined pretty easily that BABA does in fact own 22% of BSTI but the VIE is controlled by a Ma entity... tomorrow BABA could sell it's BSTI stock and have $500MM in cash though... and b) this is so immaterial to the value of BABA that it's irrelevant.  (Note, I don't own BABA)
Most other retail investors I've talked to have no idea about the VIE structure.
BABA investors own the shell company in Best Inc., Jack and Simon own 27% of the operating assets. That seems pretty material to me.

Spekulatius

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Re: BABA - Alibaba
« Reply #192 on: September 18, 2018, 05:55:00 PM »
Its possible to do due-diligence it just takes a ridiculous amount of time to get to the bottom of anything they own. I just have to assume that none of the hedge funds that own this have done any kind of work or have read a single line from an Alibaba annual report. Take for example their Best Inc. holdings, its held in Hangzhou Ali Venture Capital Co., Ltd which is owned 80% by Ma and 20% by Simon, not by the listco. They pledged their equity in the firm to one of the WFOE's so Hangzhou Ali Venture Capital Co is thus consolidated in the BABA annual report. That's not even disclosed in the BABA annual report, I ended up finding it in the Best Inc. reports.

Where are you seeing this in the Best annual report?  Under the Share Ownership footnotes the Best 20-F says Alibaba's stake is owned by Alibaba Investment Limited, which is wholly owned Alibaba Group Holding Limited, the ListCo...

The stock is a shell co., most of the business is run through its VIE.
https://www.qichacha.com/firm_ca73e5d4965cdf0c9c66938e38a3866c.html

Isn't this the case for all Chinese listed technology companies?  They all have the VIE structure, what's the difference?  Alibaba the ListCo owns Alibaba Investment Limited which owns shares in BSTI on the Nasdaq which are worth $500MM, so are you saying the public shareholders in BSTI own absolutely nothing but are paying $2.3Bn for it?
Welcome to Chinese ADR's you own an offshore shell company with contractual obligations not the actual Chinese operating assets.
You can thank Enron for changing how VIE's are consolidated as well.

Yes, but your original post implied BABA was trying to dupe the public markets through lack of disclosure that BABA owns 22% of Best Inc when really Jack Ma owns it.  There's no lack of disclosure, every investor in Chinese ADRs knows there is a VIE structure... 

The VIE structure is obviously a risk-factor, but your particular example of difficulty to understand BABA seems off, since a) in a paragraph or two we've determined pretty easily that BABA does in fact own 22% of BSTI but the VIE is controlled by a Ma entity... tomorrow BABA could sell it's BSTI stock and have $500MM in cash though... and b) this is so immaterial to the value of BABA that it's irrelevant.  (Note, I don't own BABA)

Itís never irrelevant when you find a cockroach.
To be a realist, one has to believe in miracles.

cmlber

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Re: BABA - Alibaba
« Reply #193 on: September 18, 2018, 07:31:14 PM »
Its possible to do due-diligence it just takes a ridiculous amount of time to get to the bottom of anything they own. I just have to assume that none of the hedge funds that own this have done any kind of work or have read a single line from an Alibaba annual report. Take for example their Best Inc. holdings, its held in Hangzhou Ali Venture Capital Co., Ltd which is owned 80% by Ma and 20% by Simon, not by the listco. They pledged their equity in the firm to one of the WFOE's so Hangzhou Ali Venture Capital Co is thus consolidated in the BABA annual report. That's not even disclosed in the BABA annual report, I ended up finding it in the Best Inc. reports.

Where are you seeing this in the Best annual report?  Under the Share Ownership footnotes the Best 20-F says Alibaba's stake is owned by Alibaba Investment Limited, which is wholly owned Alibaba Group Holding Limited, the ListCo...

The stock is a shell co., most of the business is run through its VIE.
https://www.qichacha.com/firm_ca73e5d4965cdf0c9c66938e38a3866c.html

Isn't this the case for all Chinese listed technology companies?  They all have the VIE structure, what's the difference?  Alibaba the ListCo owns Alibaba Investment Limited which owns shares in BSTI on the Nasdaq which are worth $500MM, so are you saying the public shareholders in BSTI own absolutely nothing but are paying $2.3Bn for it?
Welcome to Chinese ADR's you own an offshore shell company with contractual obligations not the actual Chinese operating assets.
You can thank Enron for changing how VIE's are consolidated as well.

Yes, but your original post implied BABA was trying to dupe the public markets through lack of disclosure that BABA owns 22% of Best Inc when really Jack Ma owns it.  There's no lack of disclosure, every investor in Chinese ADRs knows there is a VIE structure... 

The VIE structure is obviously a risk-factor, but your particular example of difficulty to understand BABA seems off, since a) in a paragraph or two we've determined pretty easily that BABA does in fact own 22% of BSTI but the VIE is controlled by a Ma entity... tomorrow BABA could sell it's BSTI stock and have $500MM in cash though... and b) this is so immaterial to the value of BABA that it's irrelevant.  (Note, I don't own BABA)

Itís never irrelevant when you find a cockroach.

What is the cockroach?  That a company controlled by Ma owns the operating assets and all that the BSTI shareholders own is a contractual right to the profits of those assets?There is nothing being hidden, everyone knows this and it's fully disclosed in every Chinese tech ADR.  Alibaba DOES own 22% of BTSI outright...  tomorrow, Alibaba could sell those shares and would have $500MM in cash.  What am I missing?

Liberty

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Re: BABA - Alibaba
« Reply #194 on: September 19, 2018, 12:57:56 PM »
https://www.cnbc.com/2018/09/19/jack-ma-alibaba-is-no-longer-planning-to-create-1-million-us-jobs.html

Quote
Jack Ma, founder of Chinese retail giant Alibaba, has recanted his promise to Donald Trump to create 1 million U.S. jobs.
Ma's statements come on the heels of a new round of tariffs from both the U.S. and China.

Experts have said that Ma's vow to create 1 million jobs linked to merchants selling their goods on the company's platform within five years was lofty to begin with.
"Most haystacks don't even have a needle." |  I'm on Twitter  | Interesting podcast on aging research

Value^2

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Re: BABA - Alibaba
« Reply #195 on: October 31, 2018, 11:57:03 AM »
What do people here make of BABAís accounting. the article below, while biased, raised some valid point regarding BABAís accounting. having a $1.2B company like Wazmu disappear from BABAís annual report and balance sheet without a trace is done discomforting:
https://deep-throat-ipo.blogspot.com/2018/08/the-baba-20-ffinancial-comedy-gold.html
I think they've closet full of skeletons and that's the real the reason behind Ma's retirement.


Kyle Bass just tweeted.

MUST WATCH - I interview a Chinese insider who predicts that Jack Ma will be in jail or even worse within the next year. Guo is a friend who many think is crazy. I think he is crazy smart...Xi has sent letters for his extradition https://rvtv.io/2OOXGya
(video seems to be behind paywall)

https://twitter.com/Jkylebass/status/1055886574318084097

Week ago @ CNBC https://www.youtube.com/watch?v=aCdDjXTrgTQ&feature=youtu.be&t=15m
« Last Edit: October 31, 2018, 12:18:26 PM by Value^2 »