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Saturday, September 20, 2014




Alibaba: The Chinese E-Commerce Company will be worth Close to $540 Billion  Greater than all the E-commerce in U.SA. + U.K. + Japan + Germany+ France combined! Congratulations Mr Ma, Yahoo, Soft Bank and, of course, China.
It finally happened.  I have tracked Alibaba for over a year, waiting anxiously to start buying the stock of this amazing e-commerce company,  I found out that as a retail buyer, I could buy none! Such is the paradox of world economics and the IPO business.  As a former Managing Director of a Investment Banking Firm on Wall Street, I knew a little about Initial Public Offering [IPO].  If the IPO is oversubscribed as Alibaba was,  then the ordinary folks like you and me, would have to buy the stock after the initial ‘strike price’ plus ‘green shoe’ plus the ‘pop’.  We retail buyers do not get not sloppy seconds but rather sloppy thirds, fourths and fifths.
This is how the process goes:
The owners of the company;  Mr Ma, the employees and the major investors Yahoo and Soft Bank [Japanese telecommunications company]; had/have the right to commoditize their equity at any given point.  If they need cash initially they can sell the stock privately.  If they waited and held on in order to receive a greater price before the IPO, they could sell the stock as many of the Chinese employees did and created new start-up companies in Huangzhou—province outside of Shanghai.

Next there is the IPO phase, which has a ‘strike price’, in this case, around $60 agreed upon by major worldwide investors and underwriters like Credit Suisse, Goldman Sachs and JP Morgan etc.  Is it fair that retail buyers like me and you who basically allow the IPO markets to exist because we support Federal Regulations and American Stock Exchanges [NasDaq, NYSE,] to receive the short end of the stick?  No, but who says that capitalism is fair?  Don’t believe these media pundits who claim that the markets are pure, and determine the true value of a company or asset.
  Let me explain my attitude, both positive and negative regarding this phenomenon called Alibaba.
This IPO demonstrates for once and for all that China, suis generis, is a free market system, despite all the right wing nonsense from the Republican Party that it is a Communist System.  The Chinese have proven to be more market-oriented and entrepreneurial than America has.

Take Al Gore, ‘the inventor of the Internet’,  counter-sued by Al Jazeera as a clear example of the ‘political cronyism, indigenous in our American entrepreneurial system even in the pure ‘start-up capital of Silicon Valley’.   Al Gore, George Bush jr [Houston Baseball Team] and Bill Clinton [Worldwide Initiatives] are all examples of men who use their self-aggrandizement and powers of intimidation to extract out money from various financial institutions and corporations. Collectively, be they Democrat or Republican, they are not capable of starting up a company from ground zero with nothing but an idea and ‘sweat equity’ as did Mr Ma of Alibaba. This is the American Dilemma of Distorted Capitalism.  We allow famous and infamous people to garner huge sums of money without having to create or start a business. 
Thanks Jack Ma and Alibaba for setting a good example for the rest of us.  Putin and Russia can learn a very important lesson from Alibaba.  Instead of ‘privatizing’ valuable national assets like telecommunications, oil, gas, and other resources then alloting them to Putin’s KGB cronies, who in their wildest dreams could not run a hot dog stand without cheating the public, it would behoove Putin to stop his ‘incursions.’  Allow the brilliant youth of Russia to create ‘start-ups’ without wasting valuable time and resources of the Russian Federation.

In our own country, Obama has shown little if any leadership in fostering small business growth,  allowing young people to start companies without the burdens of over regulation, complex tax structures and overwhelming baggage of student debt.  Forget gun control!  Forget terrorists!  Lets make some business!  Use federal dollars to support a new cyber-infrastructure that will foster economic growth.  Allow hard working citizens a crack at being business owners.

  

7 comments:

  1. Well here in Texas we have a tortillaria mexican food restaurant or a rim shop or some other small business on every corner so i don't exactly know what the problem is.

    All these businesses are started with SBA loans, etc., and I could be wrong but there's few if any empty buildings around because of a lack of small businesses.

    As for myself I just received my patent approval for a new type of computer hardware which makes it impossible to penetrate or hack into the computer at all. It's an absolute "firewall" which no one can break through.

    So I'm definitely NOT going to license this to any of the other dumbass hardware or software giants who have given the public nothing but shit...having the Chinese and anyone else from Russia or Nigeria hack into their systems......

    No I'm starting my own company and we'll see if anyone wants to belly up with any finance.

    So far I'm avoiding "Venture Capital" completely because they're nothing but sharks...absolute nit wit morons who think they alone are the key to anyone finding finance.

    Let me tell you something about finance....it's freakin' everywhere. There has never been so much money..SOO much money...chasing just a very few meritorious ideas and innovations.

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    1. People ask me how the rich so so much richer and pile up these huge fortunes....

      The answer is simple...leverage.

      In the past twenty years or so, since the Federal Reserve stopped publishing the money supply figures, or M2....

      The reason why they don't want the public to know is because they started flooding the world with money to use for speculation, banking and insurance...and little of this money would find it's way into the hands of consumers.

      They figured out that as long as consumers never saw this money they could print as much of it as they want and use it for speculation on equities, debt, commodities, or whatever....hedge bets going long or short on anything.....

      Look at Gordon Gekko's screen in his office in London in "Money Never Sleeps" and you'll see he has a list of equities....one list is "LONG POSITIONS" and the other list is "SHORT POSITIONS.."

      And if you have a banker, investment banker, or whoever to loan you the money to make these bets on margin..

      Then that's how you go from being a mere multi-millionaire to being a multi-billionaire...

      And it happens everyday but you have to have access to a bank with a route to the Fed Window from which all this money comes from.

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    2. To clarify...

      The reason why the Fed or other central banks didn't do this before is because they thought it would be inflationary, and it would be if the new money found its way into the hands of consumers, without any increase in product...

      But when the Fed under Greenspan, one clever Jew, realized that there would be no inflation as long as the money never reached the hands of consumers.....

      Then they started printing like mad and loaning to banks which loaned it to other banks and people for speculation...

      BTW...

      Speculation comes from the word "spec" which is to look through...to see through to something else....like spectacles or even "speculum" that instrument which MDs use to view into people's bodies....

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  2. Now as for Clinton, Gore, etc. and their financial missteps.....

    It's sort of the American way, and these people are opportunists from the start so go figure.

    But what about guys like Jimmy Carter? What about old style politicians like Sam Rayburn, who when he died had nothing in his estate...not a dime.

    Let's focus on the Carters and Rayburns and tip our hats to them from time to time and remind ourselves that not everyone is obcessed with the megalomania of personal wealth.

    As for myself all my equity is being put into a non-profit to research other technologies for sustainable agriculture, energy and water conservation.....

    I don't give a shit about personal wealth and have distain and pity for morons like Bill Gates, Paul Allen, and their ilk who are so pathetic as men..yes as men...that they think their balls will be bigger if they have the biggest yatch, etc....or that jackass here in Dallas Mark Cuban with his stupid sports team, and his mansion with the sign, "ARMED GUARDS ON DUTY."

    The idiot wouldn't need guards if he didn't go around rubbing everyone's noses in the fact that he's got all this money and is glad they don't.

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    1. It is the German and Norwegian in my that informs me that excessive personal wealth is malevolent.

      Norwegians and Germans are all about sharing the wealth, building more of it for the benefit of others...

      There are no German or Norwegian billionaires, none over in those countries or over here...

      We leave that kind of lunacy and malevolence to the English, Scotch and Scotch Irish, and all of these other peoples....particularly the slavs and Russians...

      Most of the new millionaires in the US in the last twenty years are from Russia....like over half of all new American millionaires are Russian.

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  3. The sad fact is that most of the public, til now, is engrossed with the fabulous wealth of others...

    They like to read about the lives of rich people and what problems they have and what their houses and cars look like....

    But I think this bullshit might be coming to an end.

    I know a lot of young people and believe it or not many or most of them have a greater social consciousness than their parents...perhaps due to the looming disasters the planet faces and their own shortages of jobs, high loans to repay, etc....

    I think people who contribute solutions to the world's serious problems might be the heros of the future and NOT the asshole Gordon Gekkos of the world..

    Even a lot of billionaires around are coming to this view....

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  4. TY! for your contribution! as usual, very informative.

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