NEW YORK (TheStreet) –– The revelation that a company Alibaba has purchased a stake in now has accounting irregularities isn't likely to delay its initial public offering, slated to happen later this year, according to investors.
"I think this is a 36 hour story," Ironfire Capital co-founder Eric Jackson said in an email. "By the time the roadshow starts, it will be forgotten." Jackson, a long-time Yahoo! shareholder, has recently pushed for Yahoo! to be acquired by Alibaba or Japanese conglomerate Softbank.
A division of Alibaba Group, Alibaba Pictures Group said it would delay its first-half earnings report after the company found accounting irregularities. The irregularities occurred prior to the 60% stake Alibaba took in the company, previously named ChinaVision Media Group. Alibaba spent $805 million for the stake earlier this year, amid several other acquisitions.
China has been wrought with accounting issues over the years, with Alibaba Pictures Group being the latest. "It doesn't affect my views on the parent," Jackson said. "They went on a buying spree in China. They were bound to grab some companies with accounting issues." Alibaba recently restructured its deal with Alipay, ahead of the company's long-awaited initial public offering in an effort to limit its exposure to financial services, but potentially receive a larger pie of fees from those businesses.
The IPO has largely been rumored to take place in early September, with the roadshow happening after the U.S. Labor Day holiday. Alibaba's offering could be the largest tech offering in history, surpassing Facebook's (FB) IPO in 2012, which raised more than $18 billion.
Read More: Alibaba Restructures Alipay Relationship Ahead of IPO --Written by Chris Ciaccia in New York >Contact by Email. Follow @Chris_Ciaccia
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