Alibaba’s (NYSE:BABA) warm welcome into the U.S; record-breaking IPO
Alibaba Group Holding (NYSE:BABA), the famous Chinese online trader, has at last stepped in NYSE – with the symbol “BABA”. During its first trading session, the stock price jumped up by 38%.
The company’s stock started to trade at $92.70 which was quite high as compared to the IPO price; $68. The shares were highly in demand and reached $92.70 which is quite elevated. Visa’s (NYSE:V) IPO had made $17.8 billion in 2008 whereas in 2012, Facebook (NASDAQ:FB) had made $16 billion. Alibaba’s (NYSE:BABA) IPO however broke these records by making $21.8 billion. After the Industrial and Commercial Bank of China, Agriculture Bank of China and Chinese bank, Alibaba IPO (NYSE:BABA) is at 3rd position. The stocks can be further increased by $22.1 billion if the company’s sponsors focus on strong demands, and as a result try to sell stocks worth of 40 million. This could take the company at the top of the list.
Indicating an extraordinary demand, Alibaba (NYSE:BABA) had increased the IPO’s cost from $66 to $68 – this had happened 4 days before it got listed. Barclay’s PLC was selected by the company as their sponsors. Other than that, Alibaba (NYSE:BABA) signed various agreements for sponsorship purposes with different considerable banks of the United States. These banks are Deutsche Bank AG, JP Morgan Chase (NYSE:JPM), Morgan Stanley (NYSE:MS), Credit Suisse Group and Goldman Sachs (NYSE:GS).
Maximum amount of shares were assigned to large corporate stockholders like Blackrock (NYSE:BLK) which, as some sources tell, has invested in getting shares of worth $1 billion at least. Jack Ma, the president and founder, has sold 12.8 million of stocks and in return collected $867 million.
Talking about the company itself, Alibaba Group Holding Ltd. (NYSE:BABA) is basically situated in China. It is considered the world’s greatest e-commerce association. In 2013, the company had dealt with amounts greater than $248 billion by its online business. Alibaba (NYSE:BABA) tends to provide such a platform for shopping where geographical boundaries do not matter at all. Due to such facts, some people have termed Alibaba (NYSE:BABA) as a combination of Amazon (NASDAQ:AMZN) and eBay (NASDAQ:EBAY
One of the platforms provided by the company is T-Mall; and the other is called Taobao. T-Mall helps various dealers to start an online store and sell their products to customers in China. Taobao, however works differently. It links the buyers and consumers only in China, somewhat in the same way as eBay (NASDAQ:EBAY) does.
China being the most populated country provides a lot more benefit to Alibaba (NYSE:BABA). It has a market of 1.35 billion – 618 million people there use internet; 500 million are using mobile internet; and about 302 million people shop online.
Alibaba (NYSE:BABA) has enjoyed success in China for quite some time and now it has a great opportunity to increase its success story in the U.S. However, the company will take time to realize the unlimited possibilities for its business. The stockholders too, need to be a little calm in this situation.