Bought 2000 Alibaba.com Shares

At first, I was very excited when Alibaba.com announced its IPO on the Hong Kong Stock Exchange in early November, but then only to be disappointed by a regulatory procedure which blocks any purchase by US investors of any foreign IPOs within the first 40 days of trading. At that time, I thought I might not be able to buy Alibaba at all after seeing the share price jumped to HK$39.50 at the close of its first trading day in Hong Kong.

That was then. Things are quite different now.

Alibaba actually went through a roller-coaster ride in the first month after becoming a public company. The stock reached a low of HK$27.35 one week after the IPO, then bounced back to a record close HK$39.70 on November 30, but only to touch a new low of HK$26.10 on December 17, the exact date when the 40-day freeze period expires.

As I was getting ready to make the purchase, E-Trade announced last week that they are having a zero commission day today when customers can make unlimited commission free trading of both US and global stocks. It’s just what I need at the time when I need it. So last night after 12:00 pm I placed order to buy 2000 shares of Alibaba.com (1688.HK) at a limit price of HK$27.50.

etrade_alibaba.png

It saved me $30 of commission and at the close of Hong Kong trading over night, Alibaba.com settled at HK$28.00, HK$0.50 above the price I paid.

Well, is it a good time to buy the stock? Maybe, maybe not. And what’s happening in the US stock markets is not helping the HK market. Will the stock fall even more? That’s possible, especially when China is going to tighten monetary policy next year. But I plan to hold the stock for a long time, so I am not too concerned about the price at which I bought it.

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4 Responses to “Bought 2000 Alibaba.com Shares”

  1. STLPlace |  Dec 19, 2007 at 3:46 pm

    Sun,
    I certainlly wish Alibaba worked out like LFC did for you. But honestly, I felt it may work out like Baidu (best case scenario) did: BIDU was fully priced during 2005 IPO and it started to exceed first day price until this year?

    The thing I am not sure about Alibaba is:

    1) The group now has 5 or 6 divisions and Alibaba is one of them. There could be lots of related transactions going on (acct. games), but we don’t know.

    2) The slowdown of Chinese exports will affect Alibaba’s business directly.

  2. linda |  Dec 20, 2007 at 12:59 pm

    sun:

    how do you use HKD to buy the shares? did you convert your US$ into HKD? any conversion fee?

    please explain. thanks

  3. Sun |  Dec 21, 2007 at 10:18 am

    Linda: Yes, you have to deposit USD first then convert it to HKD. I paid around $11 for the conversion regardless the amount you convert.