Chinese e-commerce giant Alibaba final began trading its shares on Friday at the New York Stock Exchange (NYSE).
The company, which started trading at the NYSE under the name BABA, ended its first day of trading on Friday at USD 93.31 per share as a stock in the American markets.
The stock rose 36 percent to nearly USD 100 per share during the opening trade on Friday.
The news of Alibaba’s Initial Public Offering (IPO) debut in the American market has been making headlines for several months. But what made it big? Let’s have a look at ten things about Alibaba, and why its IPO made history:
- Alibaba debut in the US market by raising the biggest amount, i.e. USD 21.8 billion, ever raised at the US-listed IPO in the history since 2008 when credit card processing firm Visa made its IPO announcement.
- If the investment banks of the Chinese company want to sell an additional 48 million shares, then the deal could make Alibaba’s IPO the biggest worldwide, defeating the USD 22 billion IPO of Agricultural Bank of China in 2010.
- Alibaba’s giant step in the US market has not only brought cheers for the company and its founder Jack Ma, but the biggest IPO has also extended an olive’s branch to beleaguered tech firm Yahoo, an early investor in the Chinese e-commerce giant. Yahoo, which had paid USD one billion for a stake in Alibaba in 2005, has likely made USD 8.3 billion to USD 9.5 billion in its IPO and still owns a 16 percent stake in the company worth USD 37.7 billion.
- According to FactSet, Alibaba now enjoys a market capitalization of around USD 219.8 billion. This huge market share makes the Chinese company much bigger than some of the well-known and most successful American technology firms like Facebook, Amazon.com and eBay.
- Ever since Alibaba announced its IPO debut in US and recently started marketing its offering, the investors turned out in large numbers eyeing profit. Alibaba has three main subsidiaries. It owns two websites Taobao and Tmall that are alike to eBay and Amazon.com respectively. The other source of money for Alibaba is transaction fees associated with its various businesses through Alipay.
- Alibaba has a good track record as it has been consistently profitable. It had USD 8.5 billion in sales in its recent fiscal year that ended in March with net income of USD 3.8 billion. In 2013, the company had USD 5.4 billion in sales and earned profit of USD 1.4 billion.
- This is not for the first time when Alibaba has gone public. Earlier it made its online shopping portal Alibaba.com public in the year 2007 in Hong Kong. The shopping portal was a publicly traded firm only for few years and was in 2012 made private.
- Alibaba’s debut at NYSE is a big win for the stick exchange as this has made it the second A-list tech firm to go public on the Big Board in less than a year.
- In the coming days, Alibaba has the potential to turn into an enormous cash war chest. With heavy cash in hand, the analysts say it will go hunting for acquisitions boosting customer penetration and revenue simultaneously.
- Slow and steady wins the race. This adage goes very well with Alibaba.
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