OT: Baba vs 9988.HK

Stocks A to Z
1

Anyone has opinion on whether one shall convert to HK shares?

It’s interesting Ray Dalio was heavily long baba but the latest filling shows he either sold out or converted to HK shares.

I have a lot of baba and I am thinking about converting too. I see two reasons of doing it:

  1. After conversion I will long HKD. HKD is relatively cheap now.
  2. It’s possible 9988 is a little safer to own than BABA in term of VIE structure (but some says it’s the same).

Reasons of not doing it:

  1. You can always do it anytime in the last minute, even after delisting
  2. Converting will cost 5c per share+$500 fee
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2

Can you provide a link showing the conversion?. I believe he had c1bn USD invested in BABA.

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Reasons of not doing it:
1. You can always do it anytime in the last minute, even after delisting
2. Converting will cost 5c per share+$500 fee

Another reason is that BABA could still trade on OTC, just like TCEHY (Tencent Holdings Limited) which tracks closely with Tencent shares in Hong Kong.

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4

Aha.

https://www.google.com/amp/s/amp.scmp.com/business/markets/a…

Not sure he’s actually converted? I’ve checked Tikr and cannot find anything about 9988.

5

My plan would to be to just hold OTC, my broker has confirmed it’ll just switch and I can sell in future but not buy more. I plan to hold for 10 years plus.

6

Interestingly he still has 300m of Pinduoduo and 170m of Bidu which have also been threatened with delisting. Wonder why he’s kept those and sold BABA?

7

my broker has confirmed it’ll just switch and I can sell in future but not buy more.

I wonder who is allowed to buy?

8

Well I have a British Broker who are restrictive when it comes to international. I’ve just opened an interactive brokers account and started switching accounts across. I’d be able to buy OTC there I believe. I’m just waiting for IB to sort their ISAs out and will transfer those too.

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” Interestingly he still has 300m of Pinduoduo and 170m of Bidu which have also been threatened with delisting. Wonder why he’s kept those and sold BABA?”

That why I am inclined to think he converted instead of sold out his baba shares, because PDD has no HK shares.

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10

Baidu does though 9888 (not to cause any more confusion!) Haha.

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“ Baidu does though 9888 (not to cause any more confusion!) Haha.”

Yes… though 9888 seems much more illiquid compared to bidu if you look at its chart. Only 6m HK shares per day . But 9988 is 59m shares per day

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12

My view of BABA OTC is it’ll be OK for small retail investors. It’ll still be pegged 8 to 1 to HK and like TCEHY the volumes will be sufficient 3-4 million shares a day. Anything I’m missing, hidden costs? Not feasible?

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13

Another thing I am wondering is, how the cost basis is calculated after I convert?

Does the broker adjust my cost basis from USD to HKD based on the fx rate at the time of conversion? If so, now is a good time to convert (but won’t seem to be right/fair). If not, when I sell and broker issue me 1099 how do they calculate the gain or loss?

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14

No. of Recommendations: 0
Well I have a British Broker who are restrictive when it comes to international. I’ve just opened an interactive brokers account and started switching accounts across.

IB is great, they charge me less than 1/10 than my german ‘discount’ broker. Basically I just hold some old tax advantaged shares with my german broker and do everything else with IB. I just wish they get a banking license for their Ireland sub so that I can get the multi currency credit card.
I’ll probably move some accounts from friends and relatives there too this year.

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15

Same I have all these different tax wrappers and pensions so as IB add them I’ll move across. Its the fx charges that did it for me. 0.5% down to 0.03%

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It’s still 3 years away from delisting right?

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they charge me less than 1/10 than my german ‘discount’ broker. Basically I just hold some old tax advantaged shares with my german broker and do everything else with IB.

Sounds very familiar. But there is still an advantage I see in just holding those at that ‘discount’ broker, with my otherwise practically inactive account: Brokerage + Jurisdictional risk diversification.