What Does Alibaba Want?

 | Jan 14, 2014 | 12:30 PM EST
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Andrew Ross Sorkin of The New York Times just did a very positive profile of Alibaba Group's vice chairman and former CFO, Joe Tsai.

Sorkin correctly points out that Tsai is the most popular man in the world in terms of inbound calls from investment bankers ahead of the Chinese e-commerce website's impending initial public offering. He's the man who holds the keys for when and where Alibaba will hold its IPO, which is widely expected later this year.

But why was Tsai talking to Sorkin?

I believe the answer is that he was trying to send a message to the Hong Kong Stock Exchange. In a wide-ranging interview, Tsai made remarks about how he was confused by the exchange's rejection of Alibaba's proposal to have some control over who sits on the board of directors. Sorkin agreed with Tsai's view, and suggested it was reasonable given what U.S. Internet companies are accustomed to from exchanges here.

To me, this suggests that Alibaba isn't close to filing for an IPO. It seems to want to list in Hong Kong, but on its own terms. This interview was intended to embarrass Hong Kong and get a lot of Hong Kong bankers to start lobbying the exchange and Hong Kong's Securities & Futures Commission again to let Alibaba list in exactly the manner it chooses.

If I had to guess, I'd say that Alibaba is hoping to list around May or June of this year, hoping to get Hong Kong aligned with its views over the next two to three months. This likely means that we won't see the full details of Alibaba's growth until then.

It still means that Yahoo! (YHOO) should see its shares increase in the meantime. We will get new details of Alibaba's third-quarter results when Yahoo! reports its earnings in two weeks.

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