Alibaba off to strong start; gains 38% on first day of trading - USA
ChainStoreAge.com - Sep 22nd 2014, 13:37
New York – Chinese e-commerce giant Alibaba Group Holding Ltd. on Friday closed its first day of trading, on the New York Stock Exchange, with its shares up 38% from its I.P.O., closing at $93.89.
The stock opened for trade on Friday at $92.70 shortly, a 36% jump above its initial public offering price of $68 a share. More than 100 million shares changed hands in composite trading in the first 10 minutes of trading.
The opening price valued Alibaba at $228.5 billion, beating the value of other Internet companies such as Amazon.com, EBay, and Facebook. The company’s market value was over $231 billion as of the end of Friday’s session.
Alibaba and major shareholders, including top company executives and Yahoo, which owns 22% of the company, intended to sell 320.1 million shares, or roughly 13% of the company, in the IPO. The stock trades on the New York Stock Exchange under the symbol BABA. The company and its major shareholders raised $21.8 billion in the initial offering, surpassing the value of the previous largest IPO in U.S. history, the $19.7 billion raised by Visa Inc. in a 2008 IPO.
The company, which essentially utilises an eBay model, was co-founded by Jack Ma in his apartment in 1999.
It currently accounts for 80% of online sales in China. Alibaba earned $3.7 billion in the 12 months ended March 31, 2014, up about $2 billion from the prior year.
With Alibaba finally out of the gate, some industry experts were starting to focus in on the company’s payment engine, Alipay, engine that is used by 300 million Chinese consumers (and growing).
“The continued potential/expected growth for Alipay is enormous, especially considering there are no transaction fees for consumers,” said Mark Ranta, senior solutions consultant for ACI Worldwide.From ChainStoreAge.com
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