How Is Effortlessly Getting Through SEC’s Tough IPO Processes?

Unlike other Chinese stocks, which have to deal with a mammoth task to go through the strict grilling by the regulators in order to list in the U.S., Limited seems to have a smooth sail there. The company, which has a major stake from Yahoo! Inc. (NASDAQ:YHOO), is getting through the Securities Exchange Commission (SEC) without much revision and roadblocks, contrary to the congressional report earlier, which had indicated stricter regimen for the Chinese companies.According to Bloomberg‘s, Leslie Picker, the smooth IPO processing suggests that has done a brilliant job in satisfying the requirements of the SEC, without stumbling in anything. 1

At the same time, Alibaba is bestowed with an exclusive power as it can extend the board members without actually taking approval from the rest of the shareholders. Revealing more about the group’s structure, Picker said that Alibaba functions as a partnership, and that is where lies its strength. Picker went on to explain that Alibaba has a share class structure between one class, dual class and multiple class structures, as a result of which, a major control is in the hands of 27 individuals, rather than all of the shareholders. The unique model of this partnership allows the company to appoint a majority of board members, which are then voted by the common shareholders.

Picker further disclosed that the company’s last week revisions filed with the SEC implies that the partnership could appoint more directors to the board in order to get a majority if they already don’t have it. The company currently has nine directors, four of which are appointed by the partnership and thus, the latest revision actually gives them power to appoint additional two directors after the IPO.

Alongside this, another important aspect that could enhance valuations and eventually Yahoo! Inc. (NASDAQ:YHOO), is its connection with Alipay. The group had to divest from Alipay back in 2011due to government imposed pressures as Alipay was considered too competitive for the government owned banks. So, while Alibaba divested from Alipay it had not let the information pass on to its stakeholders like Yahoo! Inc. (NASDAQ:YHOO) till the divestment was complete. But, now it is anticipated that Alibaba could reclaim and add Alipay back into its assets. However, the chances of which are not likely anytime before the IPO.

Disclosure: none

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