Alibaba: The Giant of e-Commerce

[Bussard Ramjet]

I was very surprised to find this out, but Alibaba is actually very significantly owned by foreigners.

Rather, the biggest shareholder with a third of the company ownership is Japan's Softbank. Softbank lists Alibaba as its subsidiary. The second largest share holder is Yahoo. The third being Jack Ma with around 6 % of shares.

While I expected Jack Ma to own approx. that much of the company, I was surprised that the majority share holders, and hence the board members are Japanese.

Alibaba's board is essentially ruled by Yahoo and Softbank, which have almost 50% ownership of the company, and can together make any decision and control the company.

I'm surprised, China is allowing such a behemoth to be foreign owned.

What do you guys say?

@Yizhi @AndrewJin @Shotgunner51 @Edison Chen

 

[IsaacNewton]

Pretty common.

I think Sony and Toyota ceo is/was a white guy.

 

[Place Of Space]

I was very surprised to find this out, but Alibaba is actually very significantly owned by foreigners.

Rather, the biggest shareholder with a third of the company ownership is Japan's Softbank. Softbank lists Alibaba as its subsidiary. The second largest share holder is Yahoo. The third being Jack Ma with around 6 % of shares.

While I expected Jack Ma to own approx. that much of the company, I was surprised that the majority share holders, and hence the board members are Japanese.

Alibaba's board is essentially ruled by Yahoo and Softbank, which have almost 50% ownership of the company, and can together make any decision and control the company.

I'm surprised, China is allowing such a behemoth to be foreign owned.

What do you guys say?

@Yizhi @AndrewJin @Shotgunner51 @Edison Chen

Jack Ma hold the most shares in the board of trustees. He has the exclusive decision rights.

 

[Bussard Ramjet]

Jack Ma hold the most shares in the board of trustees. He has the exclusive decision rights.

You are saying that Yahoo and Softbank have very limited voting powers?

While tenable, I don't understand why will someone forego voting rights, especially in the seed stage. Also, Alibaba is popular and profitable only in the recent years, before which it was in deep trouble financially.

 

[tsinga]

I was very surprised to find this out, but Alibaba is actually very significantly owned by foreigners.

Rather, the biggest shareholder with a third of the company ownership is Japan's Softbank. Softbank lists Alibaba as its subsidiary. The second largest share holder is Yahoo. The third being Jack Ma with around 6 % of shares.

While I expected Jack Ma to own approx. that much of the company, I was surprised that the majority share holders, and hence the board members are Japanese.

Alibaba's board is essentially ruled by Yahoo and Softbank, which have almost 50% ownership of the company, and can together make any decision and control the company.

I'm surprised, China is allowing such a behemoth to be foreign owned.

What do you guys say?

@Yizhi @AndrewJin @Shotgunner51 @Edison Chen

This is quite common.
India's largest e-com company - Flipkart, also has majority of foreign share holding.

The entrepreneurs sell stakes to foreign companies that pay them maximum.

 

[Place Of Space]

You are saying that Yahoo and Softbank have very limited voting powers?

While tenable, I don't understand why will someone forego voting rights, especially in the seed stage. Also, Alibaba is popular and profitable only in the recent years, before which it was in deep trouble financially.

Yes, I know. It's the negotiation results in the first place, Ma made the deal with the Softbank and Yahoo.

 

[JSCh]

Alibaba IPO: Shareholders can buy shares, not influence - Fortune

 

[qwerrty]

You are saying that Yahoo and Softbank have very limited voting powers?

yup. no power whatsoever.. jack ma took away alipay from alibaba into his pocket like taking candy is proof. alipay is now worth around $70 bn on its own

 

[大汉奸柳传志]

I though Yahoo sold all its shares

 

[Shotgunner51]

I was very surprised to find this out, but Alibaba is actually very significantly owned by foreigners.

Rather, the biggest shareholder with a third of the company ownership is Japan's Softbank. Softbank lists Alibaba as its subsidiary. The second largest share holder is Yahoo. The third being Jack Ma with around 6 % of shares.

While I expected Jack Ma to own approx. that much of the company, I was surprised that the majority share holders, and hence the board members are Japanese.

Alibaba's board is essentially ruled by Yahoo and Softbank, which have almost 50% ownership of the company, and can together make any decision and control the company.

I'm surprised, China is allowing such a behemoth to be foreign owned.

What do you guys say?

@Yizhi @AndrewJin @Shotgunner51 @Edison Chen

Instead of ~50%, I suppose Alibaba China is 100% foreign owned by one single fellow! (either a Cayman or a Bermudan). And I guess you already knew these

• Ordinary shares, priority shares, voting rights, board control are all different things
  
• How VC works (Softbank has a number of VC funds and one of them hit a jack pot called Alibaba)
• Alibaba, Softbank, Yahoo, just like many ordinary companies, could be partly or completely "foreign-owned" with respect to their country of incorporation
  
• Alibaba acquired Yahoo China by issuing new shares to Yahoo, the deal was pulled by Jerry Yang.

If you have basic knowledge like the answers to above, you wouldn't be so naive to be "surprised" right? Companies don't necessarily have nationalities, like in the other thread (about Xiaomi) I pointed out Xiaomi isn't 100% "Chinese".

P.S.: Xiaomi is founded by a PRC Chinese - Lei Jun. Other interests (incl all classes of shares, bonds, stock options, warrants) holders are some PE's from PRC (mostly during A-round), Yuri Milner's fund, a US fund led by Richard Ji (an ex Morgan Stanley turned fund manager), GIC (Singapore) and a few others.​

And I don't see any behemoth. You mean Alibaba which is just a bigger-than-average e-commerce company with crazy valuation? Take it easy man!

 

[Hamartia Antidote]

South African Nasper's owns 34% of Tencent
Naspers's Tencent profits surge, mkt cap passes R2trn

 

[qwerrty]

South African Nasper's owns 34% of Tencent
Naspers's Tencent profits surge, mkt cap passes R2trn

the market valuation for tencent make no sense. tencent is making a lot more profit than facebook, but trading at lower multiple earning. amazon is even more retarded with a lot of money losing every year and worth $130 bn

 

[bobsm]

I was very surprised to find this out, but Alibaba is actually very significantly owned by foreigners.

Rather, the biggest shareholder with a third of the company ownership is Japan's Softbank. Softbank lists Alibaba as its subsidiary. The second largest share holder is Yahoo. The third being Jack Ma with around 6 % of shares.

While I expected Jack Ma to own approx. that much of the company, I was surprised that the majority share holders, and hence the board members are Japanese.

Alibaba's board is essentially ruled by Yahoo and Softbank, which have almost 50% ownership of the company, and can together make any decision and control the company.

I'm surprised, China is allowing such a behemoth to be foreign owned.

What do you guys say?

@Yizhi @AndrewJin @Shotgunner51 @Edison Chen

The devil is in the details:

Alibaba IPO: Who owns the Chinese giant? -- Trefis

Excerpt:

Alibaba’s corporate structure is based on a combination of Variable interest entities, wholly foreign owned enterprises, and 100% owned intermediate holding companies, which use equity interests and Contractual obligations to operate within the PRC mandates.

The Chinese online operating properties, which operate as variable interest entities (VIE), are entirely owned by Jack Ma and Simon Xie, two Chinese nationals. These Chinese companies have simultaneously entered into agreements with wholly foreign owned subsidiaries (WFOS). The WFOS are owned by Cayman Islands based Alibaba group holding limited through intermediate holding companies or direct shareholding. The contractual agreements between the Chinese companies (VIE) and the WFOS ensure that almost all of the VIE profits are passed on to the WFOS which in turn go to Cayman based Alibaba group holding limited, which will be listed on the NYSE.

The shareholders post Alibaba IPO will, therefore, have access to the profits generated by the Chinese operating company but will have no direct ownership over the Chinese based operating companies. This is a structure which has been created to operate within the Chinese regulations and any changes in these regulations could directly impact the shareholders of Alibaba group. It is better that Shareholders hoping for a stake in the upcoming Alibaba IPO know what they will own and consider these risks in which come along with this complicated structure. However this isn’t something which should be a cause for alarm, as large institutional investors like Yahoo and Softbank are also exposed to this risk and this is also an inherent risk in every other Chinese company listed in the US. It is only a risk investors need to understand and factor into their investment decisions.

 

[AndrewJin]

I don't care. You can watch some Jack Ma documentaries.
Online shopping and online service is so integrated in our life. This biggest market is the best experimental field of all kinds of trials and ventures.

Buying coach tickets online or with APP with Alipay, done in one or two minutes.

 

[Edison Chen]

@Bussard Ramjet If all the things, business secrets or corporate strategy or its background, could be seen clearly from the public information or its F/S, that will be strange. We can never figure out how it is going on behind its equity structure, because it's very complicated. It's impossible to say Alibaba is therefore a Japanese corporation, this is absurd, because SoftBank is a VC, focusing on IT industries.....It has invested more than 600 companies in the world, it has majority shares off more than 300 IT companies.