ALIBABA made its long-awaited Wall Street debut yesterday on the heels of a record stock offering that opens the door to global expansion for the Chinese online retail giant.
Company founder Jack Ma was on the floor of the New York Stock Exchange as trading opened, while a group of Alibaba customers rang the opening bell.
A trading price was not available in the early minutes after the opening, which is not uncommon for stock market debuts.
By raising as much as US$25 billion (RM80.8 billion), Chinese online giant Alibaba is poised to break the record for the largest initial public offering (IPO) in history.
Priced at US$68 a share, Alibaba would raise US$21.7 billion with the offering of 320 million shares. If underwriters exercise the option for 48 million additional shares, the amount would top US$25 billion, breaking the 2010 record set by China’s AgBank.
Speaking to CNBC television from the trading floor, Ma said he was “very honoured, and so excited” by the market debut and that he sees enormous growth potential for Alibaba.
“We have a dream,” Ma said. “We hope in the next 15 years the world will change. We want to be bigger than Wal-Mart.”
He added that he sees Alibaba as a company that will have a huge impact: “We hope people say in 15 (years) this is a company like Microsoft, like IBM.”
Some analysts were also upbeat about Alibaba, which dominates the Chinese online retail space with Taobao.com and TMall.com.
“Alibaba has become the biggest e-commerce firm in the world in terms of gross merchandise volume,” the research firm Trefis said, setting a target price of US$80 per share.
“Alibaba will continue to retain the mammoth share of online shoppers, even if it is not able to increase it much.”
Youssef Squali at Cantor Fitzgerald recommending buying Alibaba with a target price of US$90.
Alibaba “starts trading today and with it comes the opportunity to invest in China’s largest e-commerce platform, which we believe has the potential to dominate global online commerce over time,” the analyst said in a note to clients.
“While the stock’s not cheap, we believe the company’s outsized growth and margin profiles, if sustained, should support higher valuation over time.”
The IPO allows investors to get a piece of the huge Chinese market, but it also will fuel Alibaba’s international ambitions.
Alibaba’s consumer services are similar to a mix of those offered by US Internet titans eBay, PayPal and Amazon, and it also operates services for wholesalers. AFP