A Forensic Accountant On Why Chinese Internet Companies Are So Tough To Analyze
Odd Lots
Bloomberg
4.5 • 2K Ratings
🗓️ 2 November 2020
⏱️ 55 minutes
🧾️ Download transcript
Summary
The IPO of Ant Financial will go down as one of the most extraordinary deals of all time. And in general, Chinese internet companies have been huge winners in the post-crisis period. But what does it take to really analyze the quality of their businesses? On this episode, we speak with Stephen Clapham, a forensic accountant, and the founder of Behind The Balance Sheet, who explains why understanding what's really going on with these companies is so tricky.
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| 0:00.0 | Join us in Seattle on November 8th for Bloomberg's intelligent automation briefing about transformation in a time of uncertainty. During this special evening event, top business and IT executives will gather to explore ways in which intelligent automation can offset economic |
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| 0:25.8 | Bloomberg Live.com slash automation slash radio. Hello and welcome to another Wiesenthal. |
| 0:45.0 | I'm Tracy Allaway. |
| 0:46.0 | And I'm Joe Wisenthall. |
| 0:48.0 | Joe, I don't know if you've been following what's going on in Hong Kong markets lately, but there is a very, very big event coming up. |
| 0:59.0 | Well, it's only a few weeks away now, although I have to say I'm not exactly sure when we're |
| 1:04.2 | releasing this episode but in theory there is a very big event coming up. |
| 1:08.9 | So much to choose from I feel like you know when something like, oh, I'm not sure if you're |
| 1:13.7 | following what's going out in Hong Kong lately, my mind darts to like 10 different things. |
| 1:19.9 | Yeah, okay, but in the market, there is just one thing I think that everyone is focused on at the moment and that is the IPO of Ant Group, which is the sort of offshoot of Jack Ma's Ali Baba. |
| 1:35.0 | The big thing about this particular IPO |
| 1:38.0 | is that I think they're aiming for evaluation |
| 1:41.3 | of something like at least $280 billion, |
| 1:45.0 | which would easily make it the biggest IPO ever. |
| 1:51.0 | And the whole transaction, again, it hasn't actually taken place yet, but the whole transaction is so big that we're actually seeing it affect things like demand for Hong Kong dollars. |
| 2:02.0 | We've seen liquidity in that market tighten. |
| 2:05.0 | The demand for Ant shares is expected to be so high that they haven't even bothered with Cornerstone investors, which is really unusual for an IPO. |
| 2:18.0 | We're also seeing brokers in Hong Kong offer retail investors 20 times leverage on the at shares because they're so |
| 2:27.2 | certain there's going to be a pop on the first day of trading and everyone wants to get an allocation of the equity when it first comes out. |
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