Does Weibo Have a Cayman Islands Problem?

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March 19 (Bloomberg) -- Cory Johnson reports on Weibo’s planned IPO. He speaks on Bloomberg Television's “In The Loop.” (Source: Bloomberg)

Our bloomberg west editor-at-large, cory johnson, is in san francisco.

I am used to seeing you in new york.

Glad you are here.

What have you been learning here?

I think there are some really big issues here that the alibaba ipo will raise.

It has already been made very clear, there is a filing and the news was turning to the u.s.. turning to the u.s. because the hong kong securities laws were too strict for them.

So, they came for the loosey-goosey investment protection rules of the new york stock exchange.

I think that that should be disconcerting for people.

Investors need to take a look at this notion that while they might be buying shares in this stock, they are not buying shares in the company.

As they would in hong kong.

They are not getting the control?

They are not even getting the pieces they are getting.

They actually explain the corporate structure in the filing, which is typical of the chinese companies, but different.

You have a cayman islands holding company that is holding keys is of a hong kong holding company.

Which holds pieces of a chinese holding company.

They are so far removed from actually owning stock in this company, they warn in the filing that you have essentially no legal right to anything going on in the company . because of the laws of the cayman islands and the laws of hong kong in front of the laws of china, you have no legal recourse.

Let's break it down.

If you buy a share of wave oh -- wave oh -- juevo, what are you buying?

A thing that represents a thing that represents a thing.

Do we know?

Not specifically, because of chinese security laws, it will not allow for foreigners to own pieces of this country, no company -- company, which is disconcerting.

They sort of say to the investor -- grabbed him by the shoulders and say -- look, there is no way you will ever have protection.

Some of these rules are amazing.

The cayman islands rift, it may be difficult or impossible for you to bring action against these individuals in the united states.

Even if you believe your rights have been a fringed, you cannot sue, you will have no right.

Furthermore, they warn that it is possible that the accounting firms cannot even check the books.

That the public company cannot even check on the accounting process.

I think that these things are going to get more attention with this filing.

There is going to be a honeymoon.

We have seen already, this great big company, what will it be like.

For someone like you digging into the numbers, we will see what exactly is there.

There is $1 billion in fee on one side of this deal in the u.s., which is why all of the lawyers, the ones fighting to make this happen, on the other side investor protection goes out the window.

A great concern.

You will be stuck with me for a few days.

Great to see you.

That was cory johnson, bloomberg west editor-at-large.

? moving and shaking at this hour, emilio denise.

A three-year-old son and a seven-year-old daughter they can run backwards on a treadmill in the dark.

He has written down his secrets

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


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