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Forum - Wall Street Pit (Alibaba Group - BABA)    Stock Due Diligence for All

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From: luvb2b (Rep: 1963)Date: 10/12/2017 14:49
Forum: Wall Street Pit - Msg #2696172 - List BABA msgs Thread #673958689 (Rec: 0)
another baba backed ipo is coming - remember the bsti fiasco? been reviewing f1 for qudian, it's an online consumer finance company. the whole thing is very suspicious.

the basic idea is they get a fee and interest sharing for connecting lender and borrower, and they guarantee the repayment of the principal and interest.

here are a couple interesting red flags:

loans are all non-collateralized, meaning it's basically like a credit card. customers can also draw cash advances.

qudian guarantees all principal and interest repayment to the lenders, which are usually institutions.

they seem to have reserved a bit less recently than last year, inflating their financial performance. think of it like this, it's basically like capital one - but they only earn 4.5% on each loan (roughly) and take 100% risk of loss. whereas capital one can sell off receivables, charges a higher interest rate etc. how you make the capital one model work on 4.5% interest is beyond me.

after the offering all ceo (or chairman?) shares will convert to class b. each class b has 10x voting power of a class a. his combined vote will be 82%, meaning, the one guy runs the show.

i can't imagine how this ipo is going to swimmingly - it's a huge deal too - 37m shares to come around 20.

expect baba to break lower if demand is poor as i expect.



my daily motivational reading, what the high and mighty penny pumpers say about luv:

"any knowledge you currently have about trading, finance, accounting, etc... that i don't, are things i can fully absorb within a relatively short period of time if its really important to do so... on the other hand, i am quite certain that you are incapable of grasping even 20% of the knowledge i've gained in math, associated algorithmic coding, physical chemistry, solid-state physics, materials science and engineering over decades of study." 

"There are those who market trades, and there are those who trade markets.
There are those who follow marketers, and those who follow markets.
The marketers feast on their followers; the traders feast on the markets." -luvb2b

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