(Newswire.net — September 22, 2014) — The 38% bounce in BABA price signals optimism among investors about Alibaba’s ability to continue its rapid growth trajectory as China’s middle class grows and the company expands to other parts of the world.
Moments after the stock started trading, the co-founder and CEO of the company, Jack Ma, told CNN he’s “honored” and “humbled.”
Ma told CNBC that years from now he wants Alibaba to be compared with American icons like Wal-Mart (WMT), Microsoft (MSFT) and IBM (IBM). People will say Alibaba “changed the world,” he said.
Unlike the disastrous 2012 Facebook (FB) IPO on Nasdaq, Alibaba’s first few hours as a public company went smoothly. That’s good news for the New York Stock Exchange, where Alibaba chose to list its high-profile IPO under the ticker symbol “BABA.”
Don’t worry if you’ve never heard of Alibaba. You haven’t been living under a rock.
The Chinese company, which was founded in 1999 by former English teacher Ma, has yet to make its presence felt in the US But the truckload of new cash raised by the IPO should change that.
Alibaba raised $21.8 billion late Thursday which is the largest ever IPO for a company listed on an American exchange.
It might turn out to be the biggest IPO in the world. Goldman Sach (GS) and the other investment banks that made the IPO happen have the option to purchase additional shares. If those options are exercised as expected, the Alibaba deal would raise $25 billion setting a global record.
Thanks to those impressive figures, Alibaba starts life with some elite company you’ve definitely heard of. At the $68 IPO price, Alibaba was valued at $168 billion. That’s more than Amazon.com.
“We believe that a differentiated pricing model, strong brand and unmatched scale give Alibaba an unfair competitive advantage,” Cantor analyst Youssef Squali wrote in a note.
Yahoo (YHOO) investors are also cheering because the US Internet company is cashing in a chunk of its investment in Alibaba. After taxes, Yahoo is poised to make around $5.1 billion by selling about 122 million Alibaba shares. Yahoo is holding onto a major stake that translates to billions more in value.