Adding Alibaba ($BABA) To The Stocks That I Follow

By: ispeculatornew
Date posted: 09.24.2014 (4:18 am) | Write a Comment  (0 Comments)

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$BABAUnless you’ve been living on some other planet, you’ve heard about the very recent Alibaba ($BABA) IPO. I often discuss the ecosystem play where I think owning the US Players ($GOOG, $AAPL, $FB, $AMZN, $MSFT) that dominate the web ecosystem is a great way to play it. Those players dominate to some extent everywhere around the world…almost. There is one major country where they are all but shut out: China. Some of it is caused by their refusal to abide by the rules over there that would be necessary to do business but perhaps more importantly is how different of a market it truly is. They are dominated by 3 very different kind of players (so called BAT players):

-Baidu ($BIDU)
-Alibaba ($BABA)
-Tencent (listed on Hong Kong Exchange)

I could explain what each represent but there has been so much written about them that I fear I would not be adding much value here (try this collection of links). One thing that I’ve been unable to do is buy these 3 stocks to this point. Why? I think this article expresses part of my view:

Alibaba bubble

I’m personally not as concerned about who is benefiting from the IPO but trying to get a good feel for what these companies are up has been extremely challenging. I have found a few good sources of information, try to read the earnings transcripts and I’m hoping that at some point I’ll feel like I have a good enough understanding of the Chinese internet market.

ycharts_chart

What This Also Means

I have not been active on Chinese names lately but I had also been staying out of Yahoo ($YHOO) given its high volatility linked to its Alibaba stake. That will now change and hopefully I can start putting bets on Yahoo in the near term which is extremely interesting. I’m hoping that e can also now finally start getting some answers on how much taxes Yahoo will be paying on future sales of BABA stock.

Have any of you purchased stocks of Alibaba, Tencent or Baidu?

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