Alibaba--the Chinese e-commerce giant--is expected to make its stock market debut in the US later this year. Arguably the most anticipated IPO of 2014 is likely to be one of the largest in US history, and could even surpass Facebook’s IPO.
Yahoo’s results released yesterday have further put the spotlight on this IPO. Yahoo holds about 24% stake in Alibaba.
What’s the reason for this frenzy? Here are some facts on Alibaba:
· Alibaba Group Holdings’ transaction volume in 2013 was one-third more than that of Amazon and eBay combined
· Q4 revenue for the company jumped 66% year-over-year, and the net income more than doubled
· 11.11 Shopping Festival--the one day annual online shopping event organized by the group–sees more spending than on all US online retailers on Black Friday and Cyber Monday combined
· Alibaba handles 80% of all on-line shopping in China, which has a massive growth potential
· The valuation of the company could be more than $150 billion
SoftBank Corp. that holds 37% stake in Alibaba is up more than 9% today and Yahoo is up about 6%. Some of the ETFs that will hold Alibaba after it goes public are also witnessing increased interest of late.
While the IPO will likely draw massive investor interest, it does warrant some caution as many hot technology stocks as well as some of the recent Chinese IPOs have fallen out of favor in the past few weeks. In fact, ETFs may be a safer way of investing in this company.
Will you invest in Alibaba IPO and how?