Jack Ma Yun, the founder of Alibaba Group, had expressed several times his preference for Hong Kong as the listing venue of his company. But the mainland e-commerce titan announced over the weekend that it had dropped Hong Kong for Wall Street as the site of an initial public offering that may value the firm at up to US$120 billion.
Alibaba dumped Hong Kong because the New York Stock Exchange and Nasdaq allowed a corporate structure that gives top executives the right to nominate a majority of the company's board members even if their holdings are not substantial, whereas Hong Kong did not allow such a dual-share structure.
Jack Ma owns less than 8 per cent of Alibaba, while Softbank has a 36.7 per cent stake and Yahoo controls 24 per cent.
Tencent, on the other hand, is led by Pony Ma Huateng, who holds a 10.2 per cent stake. The company was listed in Hong Kong in 2004 at an offer price of HK$3.70. The majority shareholder is Naspers, a South Africa-based media company with a 33.8 per cent stake.
Jack and Pony are not related.
But why does Pony Ma care little about the listing structure, while Jack Ma sees it as a deal breaker?
Liu Xingliang, chairman of Hongmai Software, a Beijing-based internet data analysis firm, said the key difference lay in the majority shareholders at the two firms. "Naspers focuses on media and doesn't know very much about the internet. It gives the management of Tencent lots of trust and freedom," he said.