The stories you want. The opinions that matter.
No, thanks
Tag: alibaba
Alibaba Surges In Wall Street Debut

Alibaba Surges In Wall Street Debut

New York (AFP) – A buying frenzy sent Alibaba shares sharply higher Friday as the Chinese online giant made its historic Wall Street trading debut.

In early trades after the record public share offering, Alibaba leapt from an opening price of $68 to nearly $100 and, while it dropped back, was still up some 33 percent at $90.65 at 1655 GMT.

Company founder Jack Ma was on the floor of the New York Stock Exchange before trading opened, while a group of Alibaba customers rang the opening bell.

By raising $25.02 billion, Chinese online giant Alibaba broke the record for the largest initial public offering in history, after investment underwriters exercised the option for 48 million extra shares, bringing the total to 368 million.

The previous record was set in 2010 record by China’s AgBank, which raised $22.1 billion.

Speaking to CNBC television from the trading floor, Ma said he was “very honored, and so excited” by the market debut and that he sees enormous growth potential for Alibaba.

“We have a dream,” he said. “We hope in the next 15 years the world will change. We want to be bigger than WalMart.”

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.”

With the surge in its share price, Alibaba’s market value jumped to more than $220 billion — making it bigger than Facebook ($199 billion) and Amazon ($151 billion).

The rise also lifted Ma’s personal net worth to some $17 billion, making him the richest person in China, according to Forbes magazine.

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.

“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 recommends buying Alibaba.

Alibaba presents an “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 ahead of trading.

“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 U.S. Internet titans eBay, PayPal and Amazon, and it also operates services for wholesalers.

The company earlier this year announced plans for a U.S. marketplace called 11 Main, which is currently in a test phase.

Alibaba Group made a profit of nearly $2 billion on revenue of $2.5 billion in the quarter ending June 30. Revenue rose 46 percent from the same period a year earlier.

Alibaba decided to list in New York because it wanted an alternative class share structure to give selected minority shareholders extra control over the board; the Hong Kong bourse declined to change its rules to allow this.

A U.S. government panel has warned of risks to investors because of a complex corporate structure. Alibaba is registered in the Cayman Islands and controlled by a partnership through a series of shell companies.

The IPO is also a major event for U.S.-based Yahoo, which bought a 40 percent stake in the Chinese online giant in 2005 for $1 billion and still holds 22.4 percent.

The California company is expected to walk away with close to $10 billion by paring that stake down to 16.3 percent.

But Yahoo shares were lower, amid indications that investors would cash out of the U.S. Internet firm to invest directly in Alibaba. Yahoo traded down 4.1 percent at $40.33 in midday action.

AFP Photo/Jewel Samad

Alibaba To List On NYSE With Symbol ‘BABA’

Alibaba To List On NYSE With Symbol ‘BABA’

New York (AFP) — Alibaba will list its shares on the New York Stock Exchange under the trading symbol “BABA,” the Chinese e-commerce giant said Thursday.

In the latest update for its huge initial public offering, Alibaba still left out some key information for what is expected to be one of the biggest tech sector market debuts.

The filing with the Securities and Exchange Commission said the launch would be “soon as practicable,” without elaborating.

The initial filing indicated $1 billion will be raised in the public offering, but that amount is expected to be greatly boosted with later amendments.

Analysts say the listing is expected to raise somewhere around $15 billion, which would make it the technology industry’s largest IPO since Facebook’s in 2012.

The IPO is part of efforts by Alibaba to expand globally.

In choosing the NYSE, the company dealt a blow to the rival Nasdaq, which has been a preferred option for many tech companies but experienced a number of trading problems in the Facebook market debut.

Since then, key IPOs including from Twitter and Candy Crush maker King Digital have opted for the NYSE.

Last week, a U.S. government panel warned about risks from the complex legal structure of Alibaba and other Chinese Internet firms seeking to trade on the US market.

By using a series of shell companies that are based outside China, any legal contracts may be on shaky ground, the report said.

AFP Photo/ File

Interested in news on the economy? Sign up for our daily email newsletter!

China’s Alibaba Opens U.S. Shopping Website

China’s Alibaba Opens U.S. Shopping Website

San Francisco (AFP) – China’s e-commerce giant Alibaba has launched an American shopping website as the company continues a deal binge ahead of a widely anticipated U.S. listing.

The online shopping site, called 11 Main opened on a beta, or test, basis for consumers and is invitation-only in terms of the merchants it features, the site said in a statement.

Visitors are met with a “We’re Opening Soon” message, which adds: “Our shop owners are currently unpacking and getting settled.”

The site “carefully selects merchants, making some of the best and most differentiated boutiques available to shoppers,” 11 Main said in a press release Wednesday.

“At 11 Main, we’re passionate about the shops we invite and helping them grow,” Mike Effle, president and general manager of 11 Main, said in the release.

11 Main, Inc. said it is an Alibaba Group company.

The marketplace, which hosts more than 1,000 merchants selling products ranging from clothing and interior goods to arts and crafts, will help Alibaba compete with Amazon and eBay, Dow Jones Newswires reported Wednesday.

The company plans to add other sales categories, charge as little as half the commission of other venues at 3.5 percent, and screen merchants for the quality of their goods and service, Dow Jones added.

The site is joining a crowded landscape with big players like Amazon, startups such as Etsy and traditional retailers with an online presence like Wal-Mart, the report said.

Separately, Alibaba announced its third deal in a week on Wednesday, saying it will absorb mobile browser developer UCWeb in what it called the “biggest” merger in the country’s Internet industry.

The firm has stepped up acquisitions to expand beyond its traditional online shopping business ahead of a planned U.S. listing that could raise around $15 billion, putting it on a par with Facebook’s $16 billion IPO in 2012.

On Tuesday, the company unveiled an agreement with state-backed Shanghai Media Group to develop an entertainment platform and last Thursday said it will pay $192 million for a 50 percent stake in China’s top football club, Evergrande.

Alibaba will take the one-third stake in UCWeb that it does not already own, it said in a statement.

“UC will be fully integrated into Alibaba Group. This integration will be the biggest merger in the history of China’s Internet industry,” Alibaba said, but gave no value for the deal.

UCWeb chief executive Yu Yongfu said the deal would value his company at more than $1.9 billion, according to a company memo posted online.

He compared the transaction to a move last year in which China’s most popular search engine Baidu fully acquired smartphone app company 91 Wireless Websoft for that amount, showed the memo. A company spokesman confirmed its authenticity.

Alibaba said it would settle the deal through a combined cash and stock swap transaction.

The deal would draw more mobile device users to Alibaba platforms, which have lost out to more nimble competitors, analysts said.

“Alibaba is experiencing a drop in traffic on both personal computers and mobile devices, while its source of traffic has been unstable. So it’s acquiring (UCWeb) to ensure traffic inflow,” Zhuo Saijun, an analyst at Beijing-based consultancy Analysys International, told AFP.

Founded in 2004, UCWeb is a mobile Internet software and services provider based in the southern city of Guangzhou, which claims 500 million quarterly active users worldwide for its flagship browser.

Alibaba operates China’s most popular online shopping platform, Taobao, which is estimated to hold more than 90 percent of the online market for consumer-to-consumer transactions.

Previous acquisitions have allowed the e-commerce firm to expand into entertainment and logistics.

Last month, Alibaba acquired a 10.35 percent stake in Singapore Post, the city-state’s main postal service, for $249 million as part of a strategic cooperation deal.

Prior to that, Alibaba and a private equity fund backed by the company’s founder Jack Ma said in late April they would pay $1.22 billion for a stake in China’s leading online video platform Youku Tudou.

The company has also made other forays into entertainment, including the purchase of a majority stake in Hong Kong-listed ChinaVision Media Group in March.

©afp.com