Alibaba IPO in U.S. Is to Get Money Fast: Kedrosky

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March 17 (Bloomberg) -- Alibaba kicked off the process for what may be the biggest U.S. initial public offering in two years after struggling to persuade Hong Kong regulators to approve its proposed governance structure. Bloomberg Contributing Editor Paul Kedrosky speaks on Bloomberg Television’s “Bloomberg Surveillance.” (Source: Bloomberg)

For more on what this really means, we are joined by paul could drop the -- paul kedrosky.

What is the meaning of this, what is the real reason here?

I think it is entirely to do with liquid markets.

Where you can get the highest and most liquid valuations, and really the game in the internet cycle, if you will, the second wave of all of this, get as liquid as he can as quickly as you can and use it for acquisitions and expansion.

You said a very keyword, game.

Is that what it is at this point, just a game?

It is always a game, isn't it?


It is a game in the sense where you are trying to arbitrage around the world, looking for the best valuation for your newly public company.

And technology which runs in incredibly violent cycles, you have to go with the getting is good and the getting is very good right now with respect to taking this kind of the company -- this mix of mobile and e-commerce and even a mix of a little bit of twitter in there, taking it public on the nyse.

The right decision for them.

What are u.s. companies feeling about this?

The thing amazon, twitter are scared?

Are they ramping up defenses?

Yes and no.

The primary competitive barrier is not the orthodox stuff where they have a giant moat around the businesses.

It is really about regulatory barriers ban anything else, and it operates to a barrier to other people competing with you but it also makes it difficult for them to expand.

Use all the warning -- use all the warning in the memorandum talking about regulatory barriers in terms of the many things you cannot say on the service, which prevents them from criticizing senior political figures.

This does not fly in a service in the u.s. part of why twitter is best is you can say nasty things about major figures.

Paul sweeney joins us.

You heard it before.

Just that simple.

You and i have been here.

I disagree with paul a little bit.

I think the u.s. listing is all about control.

Jack only owns about 7.4% of the company.

Amazing how much is ownership has been diluted down as an owner but he and his partnership group wants to maintain control by nominating board members to keep control of the company.

They could not do it in hong kong.

The hong kong street did not allow it.

The u.s. was open to doing it and that is why they are listing here.

Parul, let me go to you.

How does goldman's -- morgan stanley, deutsche bank -- how do they spot -- respond to this move to the united states?

It is exciting from the standpoint.

This is the kind of stuff they love to sink their teeth into, in terms of these major marquee offerings.

They will have a massive audience of institutional investors that they just finished talking to in context with the twitter ipo in the fall.

They know exactly who has an appetite for this kind of offering and who will take top donna, and that is what alabama -- alibaba management wants.

Paul, i am glad you went there.

What is the lesson coming out of twitter that was so much more spectacular than facebook?

We talked about the time.

It was so much more professionally managed offering, as they took it around.

Insofar as they can, they will try to follow the exact same playbook which is to say no leaks, careful control of information, a management team that is supportive of key messages, no one goes rogue part of the way through and an identified list of marquee investors to take in excess of 50% of the pre-ipo shares.

Smart conversation.

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


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