Alibaba shares surge in their NY stock market debut
New York Stock Exchange with Alibaba logo
The New York Stock Exchange was festooned in banners of Alibaba’s signature orange and white
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Alibaba sets share price at $68
Alibaba’s shares opened significantly above their initial price on the New York Stock Exchange (NYSE) on Friday, a sign of the excitement surrounding the Chinese internet giant.
Shares in the company made their debut in the US at $91 (£56) per share, after being priced at $68 late on Thursday.
The NYSE was festooned with the orange and white logos of the company to herald its arrival on public markets.
Founder and chairman Jack Ma rang the opening bell.
The company raised nearly $21.8bn in its share sale, indicating strong investor appetite for China’s e-commerce giant.
Based on that price, Alibaba had a market value of around $168bn - which was quickly surpassed in the first minutes of trading, making it significantly larger than Amazon in size.
US, Chinese and Alibaba flags outside NYSE
Investors are eager to get a piece of China’s e-commerce market, which is expected to grow significantly
If Alibaba’s bankers decide to take up an option in which they can purchase 48 million shares themselves, then Alibaba’s launch will have raised nearly $25bn - breaking the previous $22.1bn record set by China’s Agricultural Bank in 2010.
A way in
Alibaba operates a series of online marketplaces in China and elsewhere, handling more transactions than Amazon and eBay combined.
In this photo provided by the New York Stock Exchange, Alibaba founder Jack Ma, center, poses for a photograph before ringing the opening bell to celebrate his company"s initial public offering, Friday, Sept. 19, 2014, in New York
Alibaba’s founder and chairman Jack Ma (middle) rang the opening bell in celebration on Friday
It is responsible for more than 80% of online e-commerce in China.
Alibaba’s share sale is being viewed as a way to invest in e-commerce growth in China.
Already, the country is home to the largest population of internet users on the planet - and most estimates say that only half of China’s 1.3 billion residents have signed online.
That is why investors have been angling for some time to get a piece of Alibaba - long the market leader in e-commerce in China.
Alibaba employees at new york stock exchange
Alibaba’s employees were at the exchange, behind a banner listing some of Alibaba’s websites
However, investors are not buying shares directly in Alibaba’s companies operating in China, but rather in a holding company in Cayman Islands which has a profits contract with Alibaba.
That has made some wary, and it is one reason why Alibaba did not list on Hong Kong’s stock exchange.
Alibaba Group Holding Ltd founder Jack Ma (2nd L) poses as he arrives at the New York Stock Exchange for his company"s initial public offering (IPO) under the ticker “BABA” in New York September 19, 2014.
Like other giant technology share sales of late, Alibaba’s is expected to mint several new millionaires
Either way, the sale is expected to make millionaires out of a large number of the company’s managers, software engineers and other staff.
Currently Alibaba’s single largest shareholder is Japan’s Softbank which holds a 32% stake.
US search giant Yahoo also has a stake.
The firm made a profit of almost $2bn in the three months to the end of June, with sales up by 46% year-on-year to $2.54bn.