The most eagerly awaited initial public offering since Facebook Inc NASDAQ:FB is set and it’s going to happen all sorts of soon under the ticker symbol BABA. CNBC is reporting that orders will be accepted after 4:00PM EDT and at that price Alibaba Group Holding Ltd NYSE:BABA will be valued at $175 billion which is a staggering valuation that surpasses 95% of the S&P 500. It will also make it the largest IPO in United States history after Visa raised $19.7 billion in 2008. If you’re thinking of getting in tomorrow it’s important to know that market orders will not be accepted so you will require a Limit.
While the stock will begin trading around 11AM EDT, that is subject NYSE bank instruction to brokers.
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Alibaba – Huge IPO, the biggest
Not only is it the biggest IPO in the history of the United States it tops the list internationally. Goldman Sachs (Asia) raised $19.2 billion when it took ABC Bank public on the Hong Kong/Shanghai exchange in July of 2010. Merill Lynch raised $19.1 billion in 2006 when it took ICBC public in Hong Kong/Shanghai. In 1998, Goldman Sachs (Asia) raised $18.1 billion on the Tokyo Exchange for NTT Mobile. The Visa IPO represents fifth-place on the all-time list.
Credit Suisse and investors alike are praying that the most anticipated IPO since Facebook will not resemble Facebook’s disastrous launch that was mired in filing and technological snafus that saw prices fall and launched a rash of lawsuits against Facebook and its underwriters.
The pricing comes in at the top end of its expected price and right in line with analysts’ recommendations. Somewhat strangely, if you’re willing to shell out $68 a share you won’t actually hold a stake in Alibaba but rather a “piece of paper” that is tied to a holding company in the Cayman Islands that is connected to the profits of the Internet giant.
Much to the chagrin of those that pound home the importance of education, Jack Ma founded Alibaba in 1999 after twice failing his college entrance exams.
The retailer resembles eBay in many ways, with a considerable larger market. For the Chinese, Alibaba offers opportunities to purchase goods: Tmall and Taobao. The former offers products from official brand retailers while Taobao allows individual sellers to market their wares. On China’s Singles’ Day last year (the largest shopping day), the two sites combined for sales of $5.7 billion to give perspective into the scope of Alibaba.
Alipay facilitated nearly all transactions and was spun-off from Alibaba ahead of the IPO.
“It looks like they priced this to sell,” says John Fitzgibbon of IPOScoop.com.
“It’s going to be a wild day in the morning,” Fitzgibbon says referring to the Facebook affair. “NYSE should have it under control.”
Suffice is to say, ValueWalk will have lots more on Alibaba tomorrow morning and into the afternoon.