Alibaba Group Holding Ltd (BABA) Hopes That Investors Will Stay Around

Investors are now bracing themselves to see if they made the best decision by buying stake in Alibaba Group Holding Ltd (NYSE:BABA). During an interview on Fox Business, Priceline co-founder, Jeff Hoffman, questioned whether insiders who own almost 61% of the company’s stock will work to kill the stock through quick-selling or will stick around to spur growth. 1

“[…] It is an issue specifically in the Alibaba Group Holding Ltd (NYSE:BABA) case because I think the number is 61% of that equity is going to be controlled by insiders. You are going to have the Facebook situation where all the insiders selloff and they kill the stock price shortly,” said Mr. Hoffman.

Hoffman argues that it will be interesting to see whether the majority of the shareholders in the company will stick around after the IPO to steer the company or whether they will look to sell off quickly. On the other hand, Hoffman believes that Alibaba Group Holding Ltd (NYSE:BABA)’s founders will stick around to create a legacy for their names.

The main concern at the moment is whether Alibaba Group Holding Ltd (NYSE:BABA) will tumble like Facebook Inc. (NASDAQ:FB), and then start to find its way in the industry. Having core members in the company care much about the long-term rather than the short-term in terms of value remains the main piece of hope for Alibaba according to Hoffman.

“You hope that you have core members on the team that cares about something after the money. It is the sort of Maslow’s Pyramid. Now I got money what is important to me? Respect legacy; those things are important, and some people will stay to build that,” said Mr. Hoffman.

Hoffman also reiterated his confidence for Jack Ma at Alibaba Group Holding Ltd (NYSE:BABA); who believes can steer the giant Chinese company going forward. It awaits to be seen, the number of people who got allocated shares at the IPO after filing for the same. Alibaba carried out a successful IPO raising $21.8 billion; the amount that could rise, should Underwriters exercise an option to buy more shares.

Also, it is worth noting that Alibaba Group Holding Ltd (NYSE:BABA)’s listing has not yet opened.


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