The Chinese internet giant Alibaba finally went public Friday, raising $21.8 billion in what was the largest tech IPO of all time.
Following his company’s historic IPO, Alibaba CEO Jack Ma went on air with the crew at CNBC’s “Squawk on the Street.”
Ma clearly looked excited about the milestone, but what really stood out during the interview was his use of the word “trust.” He repeated it eight times and stressed how Friday’s IPO validates Alibaba’s credibility.
“Today what we got is not money. What we got is the trust from the people,” Ma said.
Ma reiterated this when he was asked about concerns related to his company’s transparency and the Chinese government’s possible interference in it.
“Trust. Trust us, trust the market, and trust the young people. Trust the new technology. The world is getting more transparent. Everything you worry about, I’ve been worrying about in the past 15 years … I want to tell the investors, we take care of them,” Ma said.
He continued, “Because when you trust, everything is simple. If you don’t trust, things get complicated.”
Ma’s comments could be in reference to the repeated questions over his company’s level of transparency.
The Chinese government doesn’t allow foreigners to directly invest in its internet companies. In order to get around this law, Alibaba runs on a complicated structure called variable interest entities (VIEs). Under the VIE, Alibaba incorporated a shell company in the Cayman Islands— perhaps, better-known for being offshore tax shelters — that owns a “contractual claim” on Alibaba’s profits.
This is a pretty common business structure among Chinese internet companies attracting foreign investment. But the problem is that the Chinese government has never endorsed this law, which makes it a risky bet for foreign investors. Senator Bob Casey, in fact, wrote a letter to the SEC on Wednesday, demanding better regulations for companies like Alibaba.
But if today’s IPO is any indication, investors are clearly not concerned about any of this. Alibaba shares closed at $93.89, up 38% from its IPO pricing Friday. That makes it the fourth most valuable tech company in the world.