Skip to content
Subscriber Only
Opinion
Barry Ritholtz

The Alibaba Story-Telling Failure

Investors seem to require a "story" to justify their decisions, even though the story often is wrong.
Wanted: Fiction writers to come up with riveting copy for the pending Alibaba IPO. Photographer: Andrew Harrer/Bloomberg.
Wanted: Fiction writers to come up with riveting copy for the pending Alibaba IPO. Photographer: Andrew Harrer/Bloomberg.

Late last year, we had a wholesaler from a major exchange-traded-fund firm visit our office. At the time, the chatter was all about the planned Alibaba Group Holding Ltd. initial public offering. It was going to be, in his words, "huge, disruptive, incredibly powerful -- and you cannot get any."

Never mind that IPO returns are on average mediocre or worse, or that chasing hot syndicate deals isn't in our wheelhouse. This guy had a great story to tell, and to the uninitiated, it was enthralling.