Billionaire investor Mark Cuban is a strong believer that Chinese’s online sensation Alibaba Group Holding Ltd (NYSE:BABA) should not have been allowed to list in the U.S despite acquiring stakes in it. During an interview on CNBC, Mr. Cuban acknowledged being a hypocrite in investing in the stock, despite his strong opposition to the stock trading in the U.S.
Cuban argues that it will be impossible for the SEC to curtail any form of insider trading in Alibaba Group Holding Ltd (NYSE:BABA) on the fact that the company is based in a communist country. The billionaire investor believes the SEC will not matter a lot in dealing with Alibaba especially in enforcing insider trading rules as they continue to lag behind in enforcing them.
“The market is the market at this point and I don’t expect the SEC to do a whole a lot of consequences when it comes to insider trading in the first place. My point was that the largest IPO in the history of the stock market is a Chinese company and its communist country,” said Mr. Cuban.
The billionaire investor believes it will be extremely hard for Alibaba to refuse to give in, to demands for inside information about the company’s operations especially if the demands are coming from the government. The SEC according to the investor should have turned down Alibaba Group Holding Ltd (NYSE:BABA) push to be listed in the U.S as controlling its operation going forward will amount to failure.
“If you are host and based in a communist country, where the only rule of law is what the communist parties say it is.How can you enforce any type of laws at all? ” said Mr. Cuban.
Listing of other Chinese companies in the U.S should also be barred according to Cuban as one of the ways of ensuring that insider trading rules are enforced with ease by the SEC. Cuban reiterates that he only invested in Alibaba with a caveat whereby he takes 3-4% of his portfolio and invest in hedges as one of the ways of protecting his positions.
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