Are Alibaba’s Best Days Ahead, or Behind It?


This week’s record-setting IPO of the Chinese Internet firm Alibaba makes it feel like it’s 1999 all over again (a year I remember with some regret—I joined a “b to c” dot-com company which folded 18 months later).

But I have been feeling for some time that America’s IPO market it’s booming, but broken. I’ve been reading a lot of research recently, including this fascinating NBER paper looking at how much more robust innovation and investment is in private firms, rather than public ones. Particularly for tech companies, their best days as innovators and creators tend to be before they go public, rather than after. Once they are in the public markets, they become beholden to the quarter, and it’s more difficult to justify long-term investment and strategies that won’t yield fruit quickly (this is all the more true with the rise of “activist” investors).

It will be interesting to…

View original post 40 more words


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s