Alibaba IPO – thoughts

If you ever had any thoughts of investing in Alibaba (NYSE: BABA), I will just summarize it in this following chart:

94-047

The most relevant footnotes are as follows:

(1) Includes approximately 70 subsidiaries and consolidated entities incorporated in China and approximately 120 subsidiaries incorporated in other jurisdictions that are not illustrated in this chart. In addition, the entities pictured in this chart hold, directly and indirectly, an aggregate of approximately 40 additional subsidiaries and consolidated entities incorporated in China and approximately 40 additional subsidiaries incorporated outside of China not pictured in the chart.
(7) Each of these variable interest entities is 80%-owned by Jack Ma and 20%-owned by Simon Xie, other than Zhejiang Taobao Network Co., Ltd., which is 90%-owned by Jack Ma and 10%-owned by Simon Xie.

Good luck figuring out what is beyond the first layer of the corporation and what these variable interest entities are all about. I am reasonably sure insiders will do quite well as long as they are continued to be sanctioned by the state.

Make no mistake – Alibaba is an incredible commercial operation on the level of Ebay and lesser to Amazon, but the people that are going to get rich out of this operation are not going to be the people investing in Alibaba Group Holdings Limited (Cayman Islands) common shares.