Alibaba Shares Remain Out of Reach in China, For Now (paywall) – The Wall Street Journal

What happened: According to a source close to the matter, Alibaba and JD.com, two Chinese tech and retail leaders whose stocks are listed in the U.S, plan to suspend their plan to return home via China Depository Receipts (CDRs). The report says the decision is due to concerns over weak stock market performance and lack of sufficient administrative support. Government officers also worry that introducing heavy capital into the stock pool will further drain domestic liquidity.

Why it’s important: The reported suspension of some tech giants’ CDR plan partially explains Chinese tech companies’ recent oversea IPO mania. Meanwhile, what deserves closer attention is alternative financing channels (particularly recent IPOs outside China) that could support Chinese tech companies’ expansion-for-scale strategy. The strategy puts scalability before to profitability. To sustain business models and increasing competition, real capital efficiency and financing capability become crucial.

Start your free trial now.

Get instant access to all our premium content, archives, newsletters, and online community.

Monthly Membership

Yearly Membership

What you get

Full access to all premium content and our full archives

Members'-only newsletters

Preferential access and discounts to all TechNode events

Direct access to the TechNode newsroom

Start your free trial now.

Get instant access to all our premium content, archives, newsletters, and online community.

Monthly Membership

Yearly Membership

Runhua Zhao

Runhua Zhao is a technology reporter based in Beijing. Connect with her via email: runhuazhao@technode.com