Alibaba Sets IPO Price at $68, at High End of Expected Range

3383 People Viewed - about 51 months ago World

Amazon and eBay should watch their backs.

Alibaba Holdings Ltd., the Chinese e-commerce giant founded by entrepreneur Jack Ma, priced its shares Thursday at $68 per share, at the high end of the expected range of $66 to $68 and setting up what's expected to be the biggest IPO in history.

Although the IPO is likely to be the biggest in history, some analysts think the pricing is conservative. The price values Alibaba at almost $168 billion. That's bigger than the current market value of Amazon, Cisco, and eBay.

The company, which controls 80 percent of the e-commerce market in China, is expected to raise in excess of $21 billion when its shares start trading Friday on the New York Stock Exchange. The deal will generate a $6 billion in after-tax cash for Yahoo, which is selling 27 percent of its stake in the company.  

Jack Ma gives a thumbs-up as he arrives to speak to investors at an IPO roadshow

The IPO caps a remarkable 15-year journey for Jack Ma, who founded the company in his Hangzhou apartment with 12 partners and $60,000. After a brief hiccup in 2002 when the company almost collapsed, Alibaba not only rode the e-commerce wave in China, it helped create it, with both a payments system Alipay and delivery network that reached China's burgeoning consumer class.

The business model of Alibaba is not just an eBay, it's not an Amazon, it's not a Paypal. It's all of that and much more. The company's revenue in its latest quarter ending in June surged 46 percent from last year to $2.54 billion, and profits of $2 billion. In its last fiscal year ending March 31, Alibaba earned $3.7 billion, making it more profitable than eBay Inc. and Inc. combined. Amazon ended Thursday with a market value of about $150 billion while eBay's market value stood at $67 billion.

Alibaba will be listed on the New York Stock Exchange and trade under the symbol BABA starting today. 

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