Alibaba.com, the new player in the e-commerce B2B industry, was originally expected to begin selling its stock at $68 per share on Friday morning, September 19.
But before the first transaction, that expected number ballooned to between $86-$88 a share, and then just before opening it rose again to $92-$93 a share. By the first transaction, the opening price was $92.70. In very early trading, it rose to $99.70 before settling in just above $94 a share.
That’s an increase in value of 36%, which is almost unheard of when it comes to IPOs and certainly shows the potential international strength of Alibaba in the B2B world.
It would also make Alibaba.com worth approximately $240 billion dollars, compared to Amazon.com’s value of $150 billion. It will be the biggest IPO in the history of the New York Stock Exchange.
Alibaba.com has the potential to become a huge player in the distribution of a number of products, including electrical distribution. It also has a strong-hold on markets around the world. Couple that with a huge cash influx due to today’s stock trading, and Alibaba.com can strengthen its international markets while also growing to compete against the online B2B businesses like AmazonSupply.com and Grainger.
Here is the latest on the company from the Associated Press on the history of Alibaba and its potential.
New York (AP) — When Jack Ma founded Alibaba 15 years ago he insisted the e-commerce venture should see itself as competing against Silicon Valley, not other Chinese companies. That bold ambition from a time when China was still a corporate backwater has been vindicated this week by Alibaba completing a mammoth sale of shares to investors in the U.S. and elsewhere.
Charismatic by the gray standards of Chinese CEOs, the elfin Ma is nicknamed “Crazy Jack” and is seen as China’s version of Steve Jobs, Jeff Bezos or Bill Gates. Ma used his entrepreneurial wits to build up an e-commerce giant in stark contrast to the state owned companies that became behemoths because of Communist Party policies and ties to the political elite.
The initial public offering, which will raise as much as $25 billion, cements his position as one of China’s richest people. Ma will reap $867 million by selling 12.75 million shares and will still retain a nearly 8 percent stake worth $13.1 billion based on the $68 a share price that Alibaba announced Thursday. The shares start trading in New York on Friday.
A former English teacher who flunked his college entrance exam twice, Ma founded Alibaba in his apartment in 1999 with 17 friends. He wasn’t shy about his global ambitions, telling them in an early meeting that year that “our competitors are not in China but in America’s Silicon Valley,” according to a scene in the recent documentary “Crocodile in the Yangtze.” He said that when it comes to software and information, “Chinese brains are just as good as” American brains.
Ma settled on the company’s name because it could be easily pronounced in almost any language. The company started as a site to link Chinese manufacturers with buyers overseas and is now an e-commerce behemoth that’s expanded into banking, digital maps and online video.
Ma, 50, stepped down as CEO last year to focus on philanthropy but remains chairman and an important figurehead for the company’s 21,000 employees.
Ma’s path to internet retailing dominance began with a business trip to the United States in 1995 that went sour after the investor he was to meet turned out to be con man. Before he returned, he met contacts in Seattle who introduced him to the World Wide Web. His search for beer turned up nothing from China, leaving him with the kernel of an idea for a website devoted to things Chinese.
Ma partnered with a state-owned enterprise to start a Chinese version of the Yellow Pages that was Alibaba’s precursor. The venture ended with a falling out and he later founded Alibaba in Hangzhou.
The company launched retail website Taobao in 2003 to compete with eBay in China. Ma was unfazed about going up against the U.S. giant, famously saying, “Ebay is a shark in the ocean. We are a crocodile in the Yangtze River. If we fight in the ocean, we will lose. But if we fight in the river, we will win.”
Ebay shuttered its China site in 2006, a major victory for Ma.
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