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Was Alibaba Group Holding Ltd (BABA)’s IPO Really Successful? Dan Greenshields Answers

It’s hard to attach the word success to Alibaba Group Holding Ltd (NYSE:BABA)‘s story right now without sounding a bit skeptical, at least as far as the Chinese e-commerce business’ IPO is concerned.  On TheStreet, Dan Greenshields, President of ShareBuilder by Capital One tried to shed some positive light on the affair and his words echoed in the hollowness that they were spoken in. 1

There are two aspects of the Alibaba Group Holding Ltd (NYSE:BABA) IPO episode that Greenshield focused on. Firstly, raising large capital for a Chinese business and secondly the enthusiasm of retail investors. It’s hard to choose which one of them is more hollow and meaningless than the other.

“[…] Having a successful large IPO that was also, you know, the largest well known company with the Chinese connection. Raising capital is part of the capitalist system and the successful IPO they didn’t make any mistakes, they raised capital, some selling shareholders got liquidity and retail investors got to put a spade and drove the price up […],” said Greenshields.

First things first, being a Chinese business was actually working in favor of Alibaba Group Holding Ltd (NYSE:BABA) as investors wanted to grab the opportunity to profit from the world’s largest market. China’s population hasn’t let its businesses down in that regard. Moreover, despite the fact that Alibaba Group Holding Ltd (NYSE:BABA) was the world’s largest IPO, raising money was not going to be a problem. There is ample liquidity in the markets nowadays since the interest rates on US Treasuries remain exceptionally low.

Investors are open to take risks in such an economic climate and with the hype created around Alibaba Group Holding Ltd (NYSE:BABA)’s IPO, raising capital was never a serious concern. Greenshields naming this as a positive sign from Alibaba Group Holding Ltd (NYSE:BABA)’s IPO made as little sense as wearing a fur coat in summers does.

Greenshields however, didn’t just stop there. He was on a roll as he decided to bring the retail investors into the mix as well. Alibaba Group Holding Ltd (NYSE:BABA) has been nothing but a disappointment for them. Yet, Greenshields wanted to hand it to them for driving Alibaba Group Holding Ltd (NYSE:BABA)’s price up which might be one of the most expensive shows of impatience this month in the financial markets.

 If one was to just read Greenshields’ quote, they would certainly think that he was being sarcastic, but judging by his looks it seems that he missed the joke that he himself cracked.

Disclosure: none

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