Once Again, The Narrative Fails

Late last year, we had a wholesaler from a major ETF firm in our office. At the time, the chatter was all about the upcoming Alibaba IPO. It was going to be (in his words) “huge, disruptive, incredibly powerful – and you cannot get any.”

Never mind that IPO returns are on average mediocre or worse, or that chasing hot syndicate deals is not in our wheelhouse. This guy had a great story to tell, and to the uninitiated, it was enrapturing.

“This is going to be the hottest Tech IPO of the year, bigger than Twitter, bigger than Facebook. Only firms on mainland China are going to have access to it. (Not you). The way to play it is to own all of similar companies in China that are in the Technology and Internet space.”

The story, as it turns out, was completely and utterly wrong. No, thius is not listing in China. Alibaba Group Holding Ltd. is listing on the NYSE, and anyone who wants to can buy its stock. Whether you should is an entirely different matter, but not the subject of this column.

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