World Economy
0

Alibaba Prospers in Stock Market Debut

Alibaba Prospers in Stock Market DebutAlibaba Prospers in Stock Market Debut

As Wall Street cheered Alibaba's trading debut, investors from all over the world were eager to get a piece of the action. Shares in the company surged, and if more are issued Alibaba could break a world record.

When shares in the Chinese e-commerce giant Alibaba began trading at the New York Stock Exchange on Friday, a celebratory vibe accompanied the initial public offering poised to be history's biggest.

Bright orange banners had been unfurled around the exchange and Alibaba's logo could be seen on traders' computer screens before more than 100 million shares changed hands in the first 10 minutes alone.

The excitement was well-founded too – shares opened at $92.70 (72.22 euros), a 36 percent jump from the company's initial public offering price of $68. That surge lifted Alibaba's market value to $244 billion.

If underwriters exercise their right to sell 48 million more shares in Alibaba, something that the head of NYSE's global listing business, Scott Cutler, has said is likely to happen, it would elevate the IPO's size to $25 billion – more than any other listing in history.

Atop Big US Companies

The company is already worth more than big American names like Coca-Cola and Disney, and its staggering success on Wall Street is indicative of a broader trend in the tech industry, namely an impending Chinese dominance.

Largely unknown to Americans, Alibaba has edged other major online retailers, such as eBay and Amazon, out of the Chinese market, where it controls 80 percent of online sales.

Founded by the ebullient entrepreneur Jack Ma in 1999, Alibaba has since blossomed into an entity generating $3.7 billion a year. Ma, a former English teacher, first ran the company out of his apartment. As of today, he enjoys a personal fortune worth more than $14 billion.

Ma looked on as some of Alibaba's long-time customers rang the opening bell at the exchange, telling broadcaster CNBC he wanted to make sure his customers were earning some money.

"I don't want disappointed shareholders," he said.

Meanwhile, Japan's SoftBank Corp said it expected a gain of about 500 billion yen ($4.6 billion) from Alibaba Group Holding's share listing in New York, where the Chinese e-commerce leader surged 38 percent on its first day of trade.

SoftBank CEO Masayoshi Son also told CNBC that he would want to own more of Alibaba, although he reiterated that the Japanese mobile carrier and Internet media company was happy with the current 32 percent stake, which made it the Chinese company's biggest shareholder, Reuters reported.

Asked if he would like more of Alibaba, Son told CNBC on Friday: "Of course."

 

Financialtribune.com