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Why is Alibaba in Cayman Islands?
China has prohibitions on foreign ownership, which means U.S. investors won’t actually own the company’s Chinese assets. Instead, investors will own a Cayman Islands company called Alibaba Group Holding Limited. The structure is risky and may even be illegal under Chinese law, The New York Times reports.
Are all Chinese companies vie?
The Variable Interest Entity (VIE) Structure: Almost every listed Chinese company we can buy outside of China is listed through a VIE structure. Through this structure investors (usually unwittingly) don’t actually own any part of the actual underlying Chinese company.
Why is Alibaba so popular?
Alibaba is the most popular destination for online shopping, in the world’s fastest growing e-commerce market. Transactions on its online sites totaled $248 billion last year, more than those of eBay and Amazon.com combined. of China’s online shopping market is dominated by Alibaba.
What type of company is Alibaba?
Alibaba Group
| “Taobao City”, the main corporate campus of Alibaba Group at Xixi, Hangzhou. | |
|---|---|
| Traded as | NYSE: BABA SEHK: 9988 FWB: 2RR Hang Seng Index component |
| ISIN | US01609W1027 |
| Industry | Technology company |
| Founded | 28 June 1999 Hangzhou, Zhejiang |
Is Alibaba illegal?
Here’s the truth: Alibaba is a perfectly safe online platform to find products to sell online, providing that you know which suppliers and manufacturers to trust, and which you should avoid.
Do you actually own Alibaba?
Under the VIE structure, BABA shareholders outside of China don’t actually own shares. In October 2020, investors were paying over $300/share, and VIE risks were just as present then as they are now. The lack of ownership may deter shareholders from wanting to invest in a very undervalued business.
Is Alibaba a VIE structure?
The Chinese government has been pressuring companies to invest in ‘common prosperity’, an initiative to reduce inequality in the country. But in my opinion, the main risk of Alibaba and other Chinese tech companies remains the Variable Interest Entity (VIE) structure.