Alibaba Raises $21.8B In IPO, Starts Trading At NYSE
Chinese e-commerce giant Alibaba Holdings (NYSE: BABA) raised $21.8 billion on Friday when it launched its initial public offering at the New York Stock Exchange. It sold 320.1 million shares at $68, the high end of its revised price range.
Read: Alibaba Hikes IPO Price Range To $66-$68 From $60-$66
The amount raised broke records as it is the largest IPO in the US and gave Alibaba a market valuation of $168 billion, higher than Amazon, but lower than Google and Facebook. Alibaba broke the record of Visa which raised $19.7 billion.
The Chinese e-commerce giant has chances of even toppling the 2010 IPO of Agricultural Bank of China that raised $24.3 billion if underwriters of the IPO would exercise their option to sell 49 million more shares in response to the strong demand for Alibaba shares.
Alibaba reported $8.46 billion revenues for its financial year ended March 31, higher by 52 per cent compared to 12 months ago, while its EPS of $1.51 increased by 180 per cent. With over 279 million active buyers and 8.5 million sellers on three main e-commerce sites, Alibaba processed for the same 12-month period $296 billion in gross merchandise volume, more than eBay and Amazon combined.
John Fitzgibbon, principal of IPOScoop.co, explained the high demand for Alibaba shares to the Chinese giant being a real company with actual revenue and being profitable.
Alibaba started to trade at the NYSE.
Softbank, which owns a 37 per cent stake in Alibaba, said it gained $4.6 billion from the IPO, increasing by 1 per cent its stake in the Chinese e-commerce giant. Masayoshi Son, the CEO of Softbank and Japan's richest man because of the IPO, said he wants to buy more shares of Alibaba.
Read: Masayoshi Son Is Japan's Richest Man As Softbank Shares Surge Ahead Of Alibaba IPO
YouTube/Bloomberg News