It’s been one big celebration for Alibaba this past week, after the company’s historic IPO on Friday. And “The Daily Show’s” Jon Stewart is here to put it all in perspective.
As Stewart points out in his segment that aired Wednesday night, Alibaba, despite its massive $US2 billion in profit last quarter, doesn’t actually sell things. It simply connects buyers and sellers.
“So it’s Craigslist with better graphics, is that what it is?” Stewart asks.
Stewart wasn’t shy about pointing out the potential issues with Alibaba’s structure.
“Do you like Amazon but are sick of its reliability? The sense that, at any moment, you could order the new Dan Brown novel but instead be sent a box of discontinued Chinese gopher enemas? Try Alibaba!” Stewart mused.
During the segment, Stewart tries to “call Alibaba” to buy some shares of Alibaba, but is surprised to learn that you can’t actually buy Alibaba.
Alibaba is headquartered in China; what shareholders are actually buying are shares in Alibaba Group Holding Limited, which was incorporated in the Cayman Islands.
“So I paid for a share for something on an island, and I don’t own it?” Stewart asks. “You’re selling us a time share, is that what it is? A time share in a company — without giving us a free vacation to sit through your pitch?”
At that point, Stewart puts down his phone and wonders aloud why Alibaba, a Chinese company, is doing its stock offering here in the US. As it turns out, Alibaba avoided an IPO in Hong Kong because you need certain types of management and corporate governance structures in order to be listed on the stock market in that country, and Alibaba apparently felt it couldn’t fulfil those requirements, so it took its show to the US.
“Oh I see. The company’s trading in the US to escape the more stringent regulatory environment of China. China. The country whose motto is ‘Hey, let’s put lead paint in everything, including this flag,'” Stewart said.
Of course, Alibaba’s IPO was a tremendous success in the US. Its shares soared $US30 above the expected IPO price, and it’s already the fourth-most valuable technology company in the world — bigger than Facebook, IBM, Oracle, Samsung, and Amazon.
Stewart closed on this note:
“So let me get this straight: With Alibaba, we have an internet startup that makes no tangible product with a hugely inflated IPO that was in the United States only due to a Cayman Island loophole that avoids regulations in that company’s home country. Do you understand what this means? The Communists just beat us at capitalism.”
You can watch the full segment here.