Today I sold BABA for $98.25 per share for a 7.08% gain over a holding period of 14 months. I believe I sold at the top of a Wave 3 if you follow the Elliott Wave Principle of technical analysis. If I am correct then the Wave 3 peaked at $98.86. I did not want to wait around for a Wave 5 as I’ve been itching to sell this stock for a while now and there’s no telling how long it could take before this occurs.
Purchasing BABA is not one of my proudest investing moments but the gain did outperform my savings account interest rate. Sure I ended up making a gain but what was I thinking in the first place?
I typically don’t jump into IPO’s so early on. Only being 9 months old at the time of purchase, there was no history of BABA’s performance.
Plus, what the heck are investors even buying with BABA? We were not offered part of Alibaba China. BABA represents a Cayman Islands shell company which has no assets of it’s own, no shareholder rights to Alibaba China or no controls. The shell company is only a contract to share in the profits of Alibaba China.
And who determines the share of the profits? Jack Ma and his board. So they can basically say, we owe you part of the profits…if we decided there are any.
I couldn’t wait to sell. At one time I was down about 36%. Luckily I stayed the course and ended up squeaking out a profit.
By the way, Jack Ma was a former English teacher in China. After the IPO, he was the smartest and richest English teacher in the world. Good for him. I hated English class all through grade school, math was more my speed. Jack won this round.
Hi readers! Have you invested in Alibaba or any other IPO? How did it turn out for you?
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