Alibaba's Margins Are Very Attractive: Garrity

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May 6 (Bloomberg) -- GVA Research's David Garrity, S&P Capital IQ's Scott Kessler and Bloomberg's Cory Johnson react to Alibaba's U.S. IPO filing. They speak with Pimm Fox on Bloomberg Television's "Taking Stock." (Source: Bloomberg)


People have to sell something to buy something else.

These guys know the game.

I'm curious what they will say about this.

As far as portfolio allocations, david knows his stuff better than i do.

You would want to own the best thing out there.

One thing i will say, the 2013 numbers are actually, we talked about the 25% net profit margin, it is better than that.

There was a one-time payment to yahoo!

Of $561 million.

That comes out of their net profit.

It is a one-time item.

There is no seo seated -- there is no associated costs with that.

Using my adjustment, that is a 35% net profit margin that is impressive for this business.

It is such a large scale.

David garrity, what you make of this?

1.4 billion as listed as the profits, sales at high point -- you had in this additional $500 million payment to yahoo!, you have margins which may be enviable margins?

One have to look at the cost of how they are allocated and accounted for.

On an ongoing basis, as investors look at this on the institutional side they're going to strip out this.

That is going to find the basis for comparison.

Investors are looking at the gross prospects going forward are going to set the prophet bar that much higher and adjust for this one-time payment because that is the basis which the company is growing.

Scott kessler, go ahead.

I wish is going to say, first of all, i was looking at the numbers over the break.

It seems like nine percent of the revenues are related to international commerce.

A little lower than my initial calculations.

That is a very healthy some.

-- sum.

The company has 140 million active users on mobile.

You can look at twitter.

They are 200 million mobile users for active.

Pretty comparable.

The last thing to thing about is something that we thought about following yahoos results that included recent alibaba data as well as facebook's results.

Both for the fourth quarter of last year, comparable numbers in terms of size of numbers and revenue gross, and terms of operating margins.

Thank you gentlemen very much.

In the filing for alibaba they do not mention an exchange

This text has been automatically generated. It may not be 100% accurate.


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