The initial public offering (IPO) Alibaba Group Holding Limited is highly-anticipated by many people in the Wall Street as it is set to become the largest in the history of the technology industry.
Alibaba plans to price IPO after Labor Day
Many are eager to know the exact schedule of the Alibaba IPO. Today, the New York Times’ DealBook reported that Chinese e-commerce giant prefers to wait until September for its debut in the United States based on a person familiar with the situation.
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The source said Alibaba Group Holding Limited is planning to set the price of its IPO after the Labor Day. Many people involved in a public offering commented that moving the pricing date sometime in September is practical and logical to avoid the risk of aggravating investors who are planning to go on a summer vacation.
Alibaba expected to offer IPO discount
A separate report from Bloomberg indicated that Alibaba Group Holding Limited might price its IPO lower than the valuation of analysts to prevent a listing flop.
Li Yujie, an analyst at RHB Research Institute Sdn in Hong Kong said Alibaba’s valuation could be around $200 billion. Li said the valuation of the Chinese e-commerce giant will probably $50 billion lower at the time of the IPO pricing.
“Alibaba is raising so much money, for the market to support that, it’s logical that it provides some discount to investors at the time of the IPO. It has a lot of potential, but investors want to see a few quarters of results and also see how the company will strategically place itself,” according to Li.
Alibaba IPO previously speculated to be in August
There had been speculations that Alibaba Group Holding Limited will likely set its IPO in August. Last month, the Chinese e-commerce giant selected to trade at the New York Stock Exchange (NYSE) under the ticker “BABA.”
The ticker “BABA” obviously represents Alibaba, the name of the company. Some people noted that the word “ba” in Chinese means eight, which is considered a lucky number by Chinese people– the main reason some speculated that Alibaba will schedule its IPO on August 8.
NYSE to test software ahead of Alibaba IPO
Early this month, the NYSE said it would test its trading software ahead of the Alibaba IPO. The stock exchange wants to ensure that it systems would be able to handle a huge amount of messages, and firms would immediately receive reports that their orders have been completed.
Market observers anticipated that the Alibaba IPO would exceed the initial public offering of Facebook Inc (NASDAQ:FB) in 2012. The social network giant’s first day of trading suffered technical glitches at the NASDAQ as its trading software failed to handle the massive volumes of orders. The technical glitch costs market traders an aggregate of $500 million.