It was very frustrating to see, as a former Alibaba shareholder, Ant Financial get spun off with zero compensation or new share distribution. My primary reason for buying Alibaba in the first place was for Alipay.
It was a good learning experience though to be honest. Since then, I stay away from Chinese stocks on principle. I was lucky enough to be able to sell off my shares without losing anything this time, but who knows what could have happened.
Does the US have protections that prohibit companies from doing that? Or is it just that there's more faith in our legal system if a company does what isn't in the shareholders' best interest?
I believe that the managers of the company that sells/spins off a subsidiary have a fiduciary duty to get the best price for shareholders in such a transaction. This is even more so the case when a major stakeholder gets to benefit from such a transaction.
It was a good learning experience though to be honest. Since then, I stay away from Chinese stocks on principle. I was lucky enough to be able to sell off my shares without losing anything this time, but who knows what could have happened.