Some very important decisions by the company needed to be made regarding which country that they wish to use for the floatation of the company. Alibaba could have chosen a country closer to home, like Hong Kong, but they have chosen to float the company on the American stock market, because the owner of the company doesn’t lose the rights to the company in an American floatation, unlike Hong Kong.
The system that is used in Hong Kong works for them, but many big companies aren’t choosing to use the Hong Kong markets and preferring to take their business elsewhere. The numbers of large companies, meaning companies that are worth over $4 billion, are choosing other stock markets. Hong Kong hasn’t had a company this large float on the stock market since 2010.
This isn’t great news for the potential of the Hong Kong market, but they believe in the one vote system, they feel that it is right for their market and the way they want to do business. It wouldn’t be easy to change a system that had been in place and was working; it just isn’t attracting the large corporate accounts to their shores.
Alibaba Chooses US Stock Market
America’s stock market is more appealing because it allows companies to be floated on the stock market, but with the original owner still having control. In Hong Kong when a company is floated on the stock market, the company then becomes a public company and the original owner isn’t allowed to run the company.
It is going to be an option of choice, you have built a company up to a certain point, and losing control might not be an option you want to have to consider. But in the case of Alibaba, they have chosen the American option and can float the company and still regain control.