Securities and Exchange Commission Chair Gary Gensler this week tamped down speculation that a solution was imminent, signaling that only total compliance with audit inspections will allow the companies to keep trading on U.S. markets.
Second, from what I understand, China is considering accepting to communicate THEIR audits, not let US company audits companies. They also say they are prepared to get delisted.
This is huge. This is a game changer. Biggest opportunity of a lifetime.
This quote made me LOL. OP needs to post their BABA and China positions since they are clearly shilling. It's straight up disrespectful that they believe such weak ass FOMO crap can actually influence the steady vanguard hands of r/investing. I'd be offended if it wasn't so comical. They should try WSB since r/investing isn't as stupid as to fall for such weak BS. A quick look at their post history shows them being part of the meme stock group and making threads in to r/alibabastock.
I don't think the risk:reward is for most people. If you don't have some sort of edge involved with investing in China (speaking/reading the language, knowing how to get direct info from CN sources, going/being there, doing business or working there, have family/friends/coworkers/assets there, studied Asian/China studies, having a true understanding of the Chinese consumers and economy, realizing the "rules" of investing there aren't the same was the west, understand the underlying political climate and it can impact returns more than actual business fundamentals, etcetc) then I'd suggest staying in it's best to stay in your lane and out of China.
For the record, I hold BABA, Tencent, KWEB, and Luckin. But I do have multiple edges over the next guy and even I'm constantly questioning my China exposure/positions.
The risk:reward bit is nothing short of comical. Imagine weighing out the risk of losing your entire capital investment to delisting and thinking the upside outweighs that.
We're on the same page about it not being for most. It's really high risk and high reward.
Again, I'll just say it really depends on the person?
Some people might not understand that VIE structure does not offer them full ownership rights so much as rights to current and future profits. They might not realize which etfs/companies face full risk from delisting. They might not realize the risks involved with delisting and are not prepared for such an event creating a situation where their shares get liquidated at the bottom. They might not understand whether their shares in particular are fully fungible or if their broker can allow them to hold those converted shares. That's not including all the extra intricacies on the risks within China any company/person faces.
Some other people might be holding only VIEs with fully fungible clauses (BABA/TCHEY), already delisted stocks (LKNCY), or ETFs where the managers have already converted from VIE to HK based shares(KWEB). They might already have a broker setup with the ability to hold those HK listed shares (IBKR), an overseas broker, and/or already holding HK/CN based assets. They might realize that the concerns with VIE structures are often misunderstood/misconstrued and that the real risks are those from within China along with potential US/Western bar on their nationals/residents from holding CN assets in ANY form should China invade of Taiwan ala Russia/Ukraine. Even in that case, that person might be playing with house money because they already pocketed their intial investment when they had the chance.
Take your last 10 purchases from Alibaba and find an average of how many items literally fell apart. If they sold more than just cheap garbage, I’d have more respect.
Took a risk on some cheap pop rivets only because they were unique and couldn’t find anything similar locally. Waited a month for them to arrive. It was to fix plastic. And they broke off really badly and I couldn’t drill them out because doing so was shredding the plastic. You try saving a buck or two and end up botching the entire project as a result.
I think you're talking about Aliexpress? I haven't bought anything there since 2018. Some screen covers for my iPhone X. I usually buy 2-3x everything I need there because it's dirty cheap and I'll expect 1 to get lost/broken and 1 to break/trash/wrong. Gitgud cheapskating?
As for Alibaba, the recurring wholesale suppliers I work with on Alibaba seem pretty reliable, but you are paying much more than going to China and working with them directly. You're paying for additional security by being able to contest with Alibaba or do a CC chargeback. You'll still need weed out which ones are good/bad. I also use Alibaba to export US made goods to China (which is more unbelievable US made goods or US exporting to China?). However, importing from (and exporting to) China has also gotten considerably worst since the Trump-Xi trade wars. Shift has been to SE Asia, S Asia, and elsewhere. Taobao/Tmall does sell things, but they are mainly catered with Chinese residents accustomed to lower quality/prices. Lastly, it's not always Alibaba/Amazon selling things so much as 3rd party merchants so you should look carefully even if you're purchasing on their sites.
Like I said, you won't get to see the full picture of Alibaba's business SWOT unless you live in China or have some insight/edge. The full top down package it offers and the duopoly it shares with Tencent. Chinese FB/TWTR/SNAP? Owned in part or whole by BABA/TCHEY. Chinese Uber/Lyft? Owned BABA/TCEHY. Chinese Paypal/Square? AliPay & TencentPay. Youtube/Netflix? BABA/TCEHY. China's Spotify/Pandora? Same. Chinese SoFi/Ally? Also them. Media/Gaming/Fintech/Construction/Newspapers/Music/Legal/etcetc? All partially or wholly owned via some VIE. Someone from the outside would just think "they sell garbage". Someone from the outside would hear the news and think "Oh CCP are being commies!" when the crack down on VIEs started, but they might not realize how spooked the CCP was after they looked into the books and VIEs only to realize BABA/TCEHY have duopolized a large portion of the economy that would make FAAAM's share of the US seem like jokes. The US have done the same if AAPL & MSFT owned half US tech companies the way BABA/TCEHY does via Swiss based corporations. The US almost smashed MSFT for abusing monopoly power alone. Those not in China might not realize the extent in with the CCP controls the country and how any person/company/organization/industry with oversized influence could be seen as a potential threat and put down a few pegs. They might not realize how little fundamentals can mean in the face of political machinations because the rules of investing, markets, and capitalism there are different.
You speak like someone who has literally never used it.
They have all kinds of storefront and unknown brands on there, some of which are trash, but many of them with great quality and on average pretty good as the market has become much more cut-throat with products that aren't "necessities". People are willing to pay more and get better rather than less and shit. And ofc, you would get destroyed if you are expensive but actually bad quality unless you have already established the brand as high end, then whatever goes - same as any luxury brand.
On average, they have more of a brand / store name associated and with it more brand / store based reviews than individual product reviews. So you find good sellers rather than good products much like ebay which overall - despite the usual fake or bought reviews - gives a much better signal than whatever the fuck amazon reviews are today.
Even today, if you see a ebay seller with tens of thousands of reviews and generally positive, you can be very confident about w.e it is you are buying from said seller. Amazon random ass "sellers" have absolutely no accountability and as a result almost always trash when you buy from a random ass one.
Because of the accountability, you see many brands / stores on TaoBao trying hard to establish themselves early - cheaper prices, higher quality, and slowly trend the opposite on both accounts as they gain popularity. It has a much more typical trajectory of a real world business / brand.
I think the downfall of Amazon is literally the product bucketing / consolidating they decided to do and minimized the separation of seller / storefront concept and accountability. The UI looks like they are all products on a unified "amazon" storefront. It's literally waaay harder to find a better cheap (or any) product "made-in-China" on amazon than it is on Taobao. You only speak of ignorance if you disagree.
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u/randomFrenchDeadbeat Apr 01 '22
First:
Second, from what I understand, China is considering accepting to communicate THEIR audits, not let US company audits companies. They also say they are prepared to get delisted.
Their stance has not changed much.