Alibaba.com largest IPO since Google
credits: AFP
Alibaba.com, the largest business-to-business portal in China underwent its first day of public share trading in Honk Kong, and the results exceeded all expectations, as the price tripled, raising $1.5 billion. The public offering is expected to raise nearly $2 billion in Hong Kong, making its debut offering as large as Google’s 2004 I.P.O. in the United States.
Companies can post products for sale or buy from Alibaba’s Web site for free. It charges suppliers from China and Hong Kong an annual fee of 40,000 yuan ($5,294) to 60,000 yuan to become so-called premium members, giving them access to services such as a customized home page and higher placements in search results. A similar service is offered to suppliers from other regions for an annual fee of $589.
“We are pleased to welcome investors from Hong Kong and around the world to join us in building a world-class e-commerce company,” said Jack Ma, non-executive chairman of the company and chairman and chief executive officer of Alibaba Group. “Alibaba.com’s IPO ushers in a new era of e-commerce development and we look forward to pioneering an e-commerce ecosystem that benefits businesses in China and around the world.”
Chairman Ma, 43, was ranked the 148th richest person in China with an estimated wealth of $650 million, according to the 2007 edition of the Hurun Report. The IPO will “very likely” push Ma’s wealth past $1 billion, said Rupert Hoogewerf, who has produced the Hurun Report since 1999. China is home to just over 100 billionaires, the report estimates.
Alibaba.com also owns auction site Taobao, which eclipses eBay in China,as well as the online payment service Alipay.The original offer price of shares was HK$13.5, but it opened at HK$30and closed at HK$39.5, a gain of nearly 193 per cent, making the shares the largest first-day surge on the exchange this year.
Alibaba is now valued at $21.5 billion dollars , close to the market value of Yahoo, making it the most highly valued Chinese Internet company and one of the richest in the world.
The offering was reportedly 257 times oversubscribed. The closing price makes it one of the most expensive stocks on the Hong Kong exchange.The closing stock price of HK$39.5 means that Alibaba.com is valued at $25.6bn, leaping it into fifth place among global Internet companies. It also makes it the biggest Internet company in Asia, except for Japan.
