Many hedge funds that placed orders for shares in Alibaba's initial public offering received woefully small allocations, highlighting the ultra-selective process that favored investors who already have a close relationship with the company.
"It's pathetic," one hedge fund manager said Friday morning, a few hours before the Chinese e-commerce giant was expected to begin trading on the New York Stock Exchange. That fund requested $200 million in Alibaba shares and received less than $1 million worth, or one half of 1 percent of the amount requested, the manager said.
Some funds that requested smaller amounts also received tiny fractions of the quantities they requested. One fund that requested several million dollars in shares received just 1,000 shares, worth $68,000 based on the IPO price of $68 set Thursday evening.