Above: stock chart of NYSE: BABA (Alibaba Group shares) (source: google.com, Sept 18, 2015)
- On 18 September 2014, Alibaba's IPO priced at US$68;
- On 19 September 2014, Alibaba's shares (BABA) began trading on the NYSE at an opening price of $92.70 at 11:55am EST;
- On 22 September 2014, Alibaba's underwriters announced their confirmation that they had exercised a greenshoe option to sell 15% more shares than originally planned, boosting the total amount of the IPO to $25 billion.
What happened?
According to Bloomberg Business (August 31, 2015):
- “... people expected healthier growth in China’s macro economy and had higher hopes for it given a lot of people considered Alibaba as a barometer as the health of the economy ... they are just worried things are slowing faster than anticipated.” - RJ Hottovy, analyst, Morningstar Inc., Chicago;
- Alibaba is facing competition from smaller online retailers in its home market;
- While the company’s $1.3 trillion yuan ($204 billion) in total transaction value in its online marketplaces was more than six times that of JD.com Inc., China’s second-biggest e-commerce company, in the first half of this year, its 37 percent growth rate was less than half of JD.com’s;
- Slowing growth stems from e-commerce market saturation in China’s larger, wealthier cities and the company’s strategy of shifting to services over smartphones and tablets, which generate less revenue from ads compared with desktop computers. Analysts estimated in September that Alibaba’s revenue would increase 33 percent for its fiscal 2016 ending in March, the projection is now cut to 29 percent, according to data compiled by Bloomberg.
- Hedge funds have been part of the investor exodus from Alibaba as they cut their stock holdings in the company to about 3.1 percent as of the end of June from 5.2 percent in the third quarter of last year, according to data in public filings compiled by Bloomberg. They boosted their ownership in JD.com to 18 percent from 1.2 percent during the period.
A look back to September, 2014:
Allow video above to load after clicking play - if video does not play on your device go to link below
Sept 17, 2014: NSBO Head of China Research Miranda Carr discusses the coming Alibaba IPO and what to keep in mind when using their ecommerce business. She speaks with Ryan Chilcote on Bloomberg Television's “The Pulse.” (Source: Buyer Beware When Using Alibaba: Carr: Video - Bloomberg)
Alibaba:
- alibabagroup.com
- Investors: http://alibabagroup.com/en/ir/home
- alibaba.com
"NSBO is a specialist FCA-regulated investment bank with a strong focus on China, event-driven strategies and ETF execution. We have offices in London and Beijing. The Beijing office produces in-depth policy-driven macro research on China and its growing influence on the global economy. Our Corporate Finance team advises on M&A and fund raising transactions, utilising NSBO's networks in the UK, China, North America and the rest of the world. Our execution desk covers all major markets around the clock. We are dedicated to helping our clients attain the best possible results, whatever their needs. For an overview of our China Research product and capabilities click here [China’s Effect on the World - How Government Policy Impacts Investors (pdf)]." (source: nsbo.com)
See also on Domain Mondo:
- Alibaba Group $BABA, Quarterly Earnings, Webcast Replay, Lock-up
- Alibaba Group, Quarterly and FY2015, Earnings Conference Call May 7th
- Other posts on DomainMondo.com re: Alibaba
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