The “Daily Show” host started out by explaining to his viewers what Alibaba Group Holding Ltd (NYSE:BABA) actually does. Despite comparisons to Amazon.com, Inc. (NASDAQ:AMZN), Alibaba doesn’t actually sell things, it only connects vendors with clients. Stewart took the opportunity to ask:“So it’s Craigslist with better graphics, is that what it is?”
His incredulity that a company that doesn’t actually sell anything made $2 billion in profit last quarter continued, citing the company that most people liken it to, Amazon.
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Jon Stewart likes Alibaba’s reliability
“Do you like Amazon but are sick of its reliability? The sense that, at any moment, you could order the new Dan Brown novel but instead be sent a box of discontinued Chinese gopher enemas? Try Alibaba!” Stewart shouted.
Next he tries to call and buy some shares in Alibaba, but finds out that it isn’t possible to do so. The company is headquartered in China, and investors are actually buying shares in the Cayman Islands registered Alibaba Group Holding Ltd (NYSE:BABA).
“So I paid for a share for something on an island, and I don’t own it?” Stewart demands. “You’re selling us a time share, is that what it is? A time share in a company — without giving us a free vacation to sit through your pitch?”
Why did Alibaba choose the New York market?
Stewart then turns his attention to the curious fact that a Chinese company has decided to do its stock offering in the US. We are informed that Alibaba chose New York for its flotation because it wouldn’t fulfill certain requirements of management and corporate governance structures demanded by the Hong Kong stock exchange.
“Oh I see. The company’s trading in the US to escape the more stringent regulatory environment of China. China. The country whose motto is ‘Hey, let’s put lead paint in everything, including this flag,’” Stewart said.
Alibaba’s IPO was hugely successful, with shares soaring $30 above the expected IPO price. The $288 billion float makes it the fourth-most valuable technology company in the world. Or to put that in perspective, it’s bigger than Amazon.com, Inc. (NASDAQ:AMZN), Samsung Electronics Co. Ltd. (LON:BC94) (KRX:0059935), Facebook Inc (NASDAQ:FB), International Business Machines Corp. (NYSE:IBM), and Oracle Corporation (NYSE:ORCL).
Stewart concluded the segment with the following: “So let me get this straight: With Alibaba Group Holding Ltd (NYSE:BABA), we have an internet startup that makes no tangible product with a hugely inflated IPO that was in the United States only due to a Cayman Island loophole that avoids regulations in that company’s home country. Do you understand what this means? The Communists just beat us at capitalism.”