Saturday 22 March 2014

Investment & News: Hong Kong Missing Out On Alibaba And HKTV

Jack Ma's Alibaba is NOT coming to Hong Kong
Image from

A huge disappointment for all IPO investors and for Hong Kong, for missing out on one of the biggest initial public offerings in the world of the decade. A big win for New York(ers).

Who is to blame for all the loss of cash? The rigid rules and regulations of the Hong Kong Stock Exchange? Or the "innovative" governance structure that Alibaba insists?

HKTV chairman Ricky Wong Wai-kay
Image from SCMP
Photo by Felix Wong

Some will say, rules are rules, and we must follow the rules strictly as to do so, it is the job and the right thing to do. Like the Office of the Communications Authority (OFCA) continuously tells HKTV to do -- play by the rule. But let's not forget, rules are created by us, and rules must move forward as we move forward. In a world of rapid technological advancement, we are eventually the ones to suffer if we stick to our old rules.

In a South China Morning Post article, Eliza Lee Man-ching, director-general of the OFCA said "Wong seems to have mixed up his role, thinking he is the regulator and asking us to make suggestions as to the broadcasting formats that would ensure legal compliance ... For the first time, I have heard a licence holder demand from the watchdog a promise that they would not be prosecuted if they violated the law," Lee said.

I say, asking yourself, the OFCA, to make suggestions as to the broadcasting formats that would ensure legal compliance is exactly the kind of thing you should do all along over the last 10 years and not to wait until the problems surface, definitely not to wait until the HKTV chairman has to tell you that your lousy VCD-standard broadcasting format is so semi-century!

We are lucky to have true innovators who have the guts and are willingly, constantly fighting for the betterment for the citizens, for mankind. At the same time, we are unfortunate to have politicians who put their own benefits before the people and too many innovation pacifists who hug the ground for stability.

Elon Musk
Image from TIME
Tesla Motor's Chairman, Product Architect & CEO Elon Musk recently wrote a letter to the People of New Jersey on the company's blog after the New Jersey passed a ban on Tesla direct sales model, which means customers cannot buy their cars from the Tesla stores in New Jersey and Tesla cannot talk about pricing to their customers.

Quoting Elon's words, "Governor Christie had promised that this would be put to a vote of the elected state legislature, which is the appropriate way to change the law. When it became apparent to the auto dealer lobby that this approach would not succeed, they cut a backroom deal with the Governor to circumvent the legislative process and pass a regulation that is fundamentally contrary to the intent of the law."

Yes, that means New Jersey decided that they want to protect their auto dealers and allow them to go on ripping off the customers.

"As anyone who has been through the conventional auto dealer purchase process knows, consumer protection is pretty much the furthest thing from the typical car dealer’s mind." -- Elon Musk.

Governor Chris Christie
Image from Tesla Motors Club
Politics kill creativity, every time.

So, back to our Alibaba chat, who are the losers? It's always the general public.

"Alibaba's choice is a blow to Hong Kong's financial industry, in terms of lost prestige, fees and trading volumes. The absence of a large, dynamic tech company will sting the Hong Kong exchange as it tries to diversify its publicly traded stocks away from Greater China financial and property companies, bolstering its status as a global financial centre," Keith Pogson, managing partner for financial services at consulting firm EY in Hong Kong told Reuters.

And the loss keeps increasing by the days as Alibaba continues to go on a shopping spree, first buying 54.33% of Citi 21CN, then 60% of Chinavision,  then spending US$215M on messaging and free-calling app Tango, who knows how many more companies he will buy to boost his IPO debut price? What I do know is, the more he buys, the more Hong Kong loses.

For more information, do read From Alibaba To Weibo: Your A-Z Guide To China's Hottest Internet IPOs.

watchdog -- (n)[C] a person or organization responsible for making certain that companies obey particular standards and do not act illegally:
lousy -- (adj) Informal very bad
semi-century -- (n)[C] half a century. A time period of 50 years.
innovation pacifist -- (n)[C] people who believe that innovation is wrong, and so opt for not creating anything new

News & Opinions: Dark Age of Hong Kong @ Locky's English Playground

Barclays Said to Miss Out on Alibaba IPO Fees: Best of the Week @ Bloomberg

Ofca's Eliza Lee slams HKTV's Ricky Wong amid mobile television row @ South China Morning Post

Ricky Wong and HKTV must play by the rules @ South China Morning Post

OFCA rejects HKTV complaints @

To the People of New Jersey @ Blog | Tesla Motors

After New Jersey ban, Tesla Motors fights to keep Ohio sales @ San Jose Mercury News

Alibaba's choice of U.S. IPO spurred by rivals, Hong Kong impasse: sources @ Reuters

CITIC 21CN (00241.HK) places shares to Alibaba @ - News

<Resumption Ann>Alibaba buys 60% interest in CHINAVISION (01060.HK) @ - News

Alibaba Sinks $215 Million Into Messaging App Tango, Valuing It At More Than $1 Billion @ Forbes

Pick me (and only me), Alibaba and told banks @ South China Morning Post

From Alibaba To Weibo: Your A-Z Guide To China's Hottest Internet IPOs @ Forbes