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Andrige3 t1_je13sx8 wrote

Reply to comment by Fwellimort in Alibaba to split into 6 units and explore IPOs; shares pop 7% by Ben_aid

Who knows where China is going to allow these to IPO though which could dramatically change valuations. I feel like splitting it up also makes it a weaker business since a lot of these businesses have an important network effect. Imagine if you broke up Amazon into a shipping business, a media studio, an online retailer, a media company, a cloud business, etc. I think it would be a worse user experience and worse from an investment perspective.

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Fwellimort t1_je14qd8 wrote

I think the difference is Alibaba is so undervalued that the valuation currently is at the value of some businesses not existing at all.

But yes, long term as a business, not as good. But stock market is auction driven and the stock is being penalized for being too successful of a conglomerate currently (due to China risk which isn't going away).

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Andrige3 t1_je15ow1 wrote

It seems like all the China stocks are being undervalued due to political risk right now and uncertainty of regulations. I don't see how splitting the company changes this risk. This also doesn't change delisting fears. Also I think it's going to force a lot of sales if it IPOs on hong Kong stock exchange rather than NYSE.

I guess only time will tell but I'm glad I don't own baba right now even it had a burst up in the short term. I want stocks for the long term.

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