It's a Chinese company located in China, and most of its business and customers are in China. So why is it doing its IPO on the US stock market?
Shouldn't NYSE/Nazdaq disallow this? SEC and FTC have no jurisdiction in China or anywhere else outside the USA. If a chinese company listed on NYSE did fraudulent accounting or whatever, SEC can't do jack shit about it.
The whole thing seems like a clever scheme by Chinese companies and Goldman Sachs to sucker money out of U.S. investors.
Well first off, it should ring major alarm bells to any investor that Alibaba isn't doing it in their native country. I mean, either the Chinese government has rules against it, or the founders are basically trying to skirt Chinese law for whatever reason. That's a major red flag without even looking at the details of the arrangement.
Sorry, I don't buy any arguments about whether or not the Chinese government allows IPOs like that - Alibaba is the largest e-commerce site in the world doing practically Chinese-only business, and you can't figure out Chinese investment law? I don't think so.
Yes, I'm willing to call it "shady" from the get go. Either that or it's a house of cards in China that's about to collapse. I'm sorry, but if you're so business savvy to basically be the #1 marketplace in the world, out-doing Amazon, eBay and other sites combined, and you're doing the IPO in the US, there's something majority shady going on, perhaps even criminal (hiding from the Chinese government? Forget to hire the standard Communist party official?).
And oh, the SEC does have some power still - they can effectively suspend trading or even force delisting. Yes, it means current shareholders get screwed, but it prevents future shareholders from being screwed more. Hell, they can still levy fines to be paid by company owners (i.e., shareholders). It's the shareholders that are taking on a lot of risk because they can't bring the executives to bear.