Market Overview

Jack Ma: SEC 'Misunderstood' Alibaba's IPO

Share:

Alibaba Group Holding Ltd's (NYSE: BABA) Chief Executive Officer Ma Yun, known in the West as Jack Ma, feels misunderstood by the Securities and Exchange Commission, according to a Wall Street Journal reporter.

At a tech conference sponsored by The Wall Street Journal on Monday, reporter Shira Ovit tweeted that Ma said his company's recent public offering "made him believe the SEC doesn't understand Alibaba, or China."

Given significant cultural differences between East and West, Ma may on some level correct.

But it's also plausible the SEC may indeed have misunderstood, or at least overlooked, a mundane provision in Alibaba's corporate charter which seeks to make shareholder lawsuits against the company more difficult.

On page 38 of its articles of incorporation, Alibaba says that shareholders who lose lawsuits against the company must "reimburse all fees, costs and expenses."

In the interest of shareholder rights, the SEC typically forbids such provisions by listed companies, according to Reuters law columnist Alison Frank.

"It's crazy. From the SEC, this was like nothing, and it's a huge IPO," plaintiffs' attorney Christine Azar told Reuters recently. "The SEC needs to determine whether these clauses fundamentally limit the rights of shareholders."

Shares of Alibaba were last up 2.1 percent on Tuesday at $99.89, its highest level since its September 22 IPO.

 

Related Articles (BABA)

View Comments and Join the Discussion!

Posted-In: Jack Ma Wall Street JournalNews Legal Management Events Media

Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com