SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum
GLD 371.65-1.1%Nov 17 4:00 PM EST
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: A Horse With No Name who wrote (148790)5/28/2019 2:13:21 PM
From: Elroy Jetson2 Recommendations

Recommended By
dvdw©
elmatador

   of 217847
 
The companies that are the core of Alibaba’s Chinese operations – the main reason for the heated investor demand in the BABA ADR traded on the NYSE – are not even owned by the Alibaba Group Holding Ltd. traded as BABA, as China prohibits foreign ownership of Chinese assets.

BABA shares are an ADR owned and maintained by Citibank which charges a fee of 2 cents per month per share for operating the ADR.

Each BABA ADR is equivalent to one share of the VIE "Variable Interest Entity" owned by Citibank. Citibank is just one of a small number of shareholders of the VIE. Other owners include Jack Ma and I think it's safe to assume the older shareholders are the investment banks which helped take BABA public: Credit Suisse; Deutsche Bank; Goldman Sachs; JP Morgan Chase; and Morgan Stanley.

So what is the BABA V.I.E. in which Citibank has offered you BABA shares?

The BABA ADRs is part of the VIE which owns the assets of Alibaba outside of China and has a variety of unspecified contracts with Alibaba China.

If you own BABA shares, you own a piece of this mystery box of non-Chinese assets which are actually owned by Citibank. - ethicssage.com
.

Citibank could offer trading of their VIE shares in Hong Kong, but it appears far more likely that Jack Ma will sell shares in Hong Kong to raise more money for the same "Alibaba company which owns their non-Chinese assets", which would essentially be additional shares of the BABA type traded on the NYSE.

Alternately Jack Ma could obtain permission from China's government to trade an interest in the Chinese company Alibaba, which would be shares in a completely different company than BABA shares represent.

Many "shares in Chinese companies" are similar mystery boxes which in no way represent ownership of any business or assets in China. As Jay Chen says, the fact that they trade at any price at all merely indicates "the casino is open".

For disclosure purposes, I own no portion of any mystery box.

Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News