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Comment by nicholas73 | Hacker News Reader

The answer is really simple: nobody with billions actually thinks Alibaba and YHJ is worth as much as their share price, and not many common people know about Alibaba and YHJ.

It's the same reason you don't see high flying stocks like FB, LNKD, YELP, etc. actually getting buyout or tender offers for their shares.

In the event of having to sell a large block of shares, all of the share prices will crater, Alibaba included. Prices are set at the margins, so until there is a stampede the stock price will go with the flavor of the month.

Stock price != company value. Nobody will enter a position they can't get out of easily unless there is real worth in holding.

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There is no Alibaba "share price" - it is a private company.

EDIT: If you disagree with this statement, let me know what the Alibaba "share price" is and where to find it. Good luck!

It's not publicly traded ATM, but the article hints that it soon will be. But Yahoo has a stake in it, and thus it has "shares" and those shares are worth something, hence it DOES have a "share price".

EDIT: I can see that your parent does not realize (apparently) that Ali baba is not publicly traded

> Stock price != company value. Nobody will enter a position they can't get out of easily unless there is real worth in holding.

This says it all. The price of a stock does not equal the value of the underlying company. Value investors like Warren Buffett make their money by exploiting that difference.

> The answer is really simple: nobody with billions actually thinks Alibaba and YHJ is worth as much as their share price, and not many common people know about Alibaba and YHJ.

Are you saying that Yahoo Inc.'s share price is heavily determined by billionaires, but Alibaba's and YHJ's share prices are not?

I think Alibaba is private, and its "valuation" is just an analyst's estimate. That estimate could be an old figure, so the article is using inconsistent data.

They are both traded overseas, so only billionaires, funds and banks usually care for those.

Or people who actually live overseas. I hear there is quite a few of them.

Alibaba hasn't IPOed yet.

but yahoo is overseas stock for them. so?

You can buy stock overseas if your broker offers it. And you don't need to be a billionaire.

and it is expensive as hell, complicated and may result in taxes in several countries. thats why almost nobody does

No, prices are set by buyers and sellers obviously. Except in this case, most people are negative on Yahoo but don't know about Alibaba, nor do billionaires who could move the stock believe Yahoo could dispose of Alibaba at reported levels. In fact, Yahoo's stake is bigger than the initial amount of stock the IPO will offer.

This could all change of course.

Stock price most certainly equals company value. That's pretty much the definition.

Value != price

Share price is a gamble on future earnings.

> That's pretty much the definition.

Uh, no. Price is what you pay. Value is what you get. People buy stuff when they think the value they get is greater than the price they have to pay.

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