Chinese e-commerce giant Alibaba Group Holding on Thursday set its first sale of stock (IPO) at 68 U.S. dollars per share, inking a record-breaking IPO in U.S. history. Value per share is sky-high of its expected range between 66 dollars and 68 dollars that was disclosed weeks ago.
The company raised 21.8 billion dollars, offering 320 million shares, beating the 19.7 billion dollar Visa Inc. initial offering in 2008.
Could be the Biggest IPO on the Planet ?
Nonetheless, if the supporters practice the right to buy up to a total of 48 million extra shares granted by Alibaba, the total funds raised will achieve 25 billion dollars, beating Agricultural Bank of China's IPO of 22.1 billion dollars in 2010, which happens to be the biggest on the planet. The e-commerce giant would be valued at 168 billion dollars at the IPO price of 68 dollars per share.
Alibaba commenced its worldwide roadshow on Sept. 8 in New York and got enough bookings for the offering within a span of five days on account of enormous enthusiasm from financial specialists and investors. Alibaba, co-founded by Jack Ma in 1999, is one of the biggest e-commerce company on the planet. It dominates over 80 percent of all online retail sales in China.
Alibaba's plan of action is considered as a mixture of those of Amazon and eBay. In 2013, the company witnessed 250 billion worth of goods transactions which is massive compared to the earnings of Amazon and eBay combined. Alibaba's key platforms incorporate Taobao.com, China's biggest C2C site, and Tmall.com, where brands offer directly to buyers. It additionally made a Paypal-like installment framework Alipay to guarantee transaction safety between purchasers and merchants.
Kenneth Polcari, director of NYSE Floor Operations at O'neil Securities Inc., said that the market in China with practically 1.3 billion population is enormous and individuals will take a look at it very nearly as a substitute of the Chinese economy.
"If you believe in what's happening around the world, if you believe in the transition of the Chinese economy to more of a market economy, I think the potential in the future is very bright," Polcari added. Alibaba is looking to venture into the America and Europe. In the event that things go as it is expecting, surely the potential is gigantic, he said.
“I’d put them Alibaba in a class of Facebook and Google with the scale they have, growth prospects and profitability," said Scot Wingo, CEO of e-commerce software provider ChannelAdvisor. "There’s a scarcity value there.”
Alibaba submitted IPO filings to the U.S. Securities and Exchange Commission on May 6, and its shares will start trading today at the New York Stock Exchange under the symbol "BABA."