While Alibaba's shares increased more than 40 percent
on its first day as a publicly traded company, but economist Steve Beaman says that there are "some issues" people should be aware of before investing in the Chinese company.
"This is a huge company, they've been around for a long time, they're a $7.5 billion company with 22,000 employees around the world," Beaman told Ed Berliner on "MidPoint" on Newsmax TV
Friday. "It's clearly credible."
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"There are some issues though I would caution people about," he explained.
"Companies that are listed in China or Chinese grounded companies are not required to follow the same accounting rules as our American companies," he said.
"We have something called, Generally Accepted Accounting Principles, or GAAP, and the Chinese companies aren't required to follow those GAAP rules," the chairman for The Society to Advance Financial education told Newsmax.
"In addition, they don't have the anti-conflict of interest rules that we have, they don't have some of the anti-fraud provisions," he said.
"I would caution people about getting too overly excited because of what looks to be another one of these hot tech stocks," he added.
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