Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Alibaba IPO Is Going to be Huge

Companies / Corporate News Mar 31, 2014 - 01:58 PM GMT

By: Money_Morning

Companies

Kyle Anderson writes: There's still no official date set for the Alibaba IPO, but that hasn't stopped analysts and investors from speculating about the size of the company's initial public offering.

Alibaba IPOAccording to some analysts, the Alibaba IPO could raise almost as much as Facebook Inc.'s (Nasdaq: FB) 2012IPO, which raised $16 billion.


Facebook was valued at $104 billion when it made its public debut on May 17, 2012. At the time, that was the highest valuation of any American IPO.

By all accounts, Alibaba will smash that figure.

A Reuters report in February polled eight analysts who estimated that Alibaba could reach a valuation of $140 billion.

This week, the London-based, spread-betting firm "Gray Market" set the over/under line on Alibaba's valuation at an incredible $255 billion. That value was considered high, and the firm brought the line down. Currently the line is hovering between $235 billion and $245 billion.

Admittedly, Alibaba is unlikely to meet a valuation figure in the mid-$200 billion range. However, there's reason to believe the valuation total will climb past the estimated $140 billion...

Alibaba IPO: Why The Valuation Is Climbing

When news first broke about a potential U.S. IPO for Alibaba, analysts had valued the company near $100 billion, putting it right in line with Facebook's IPO. That figure started rising almost immediately.

Alibaba spent much of the past year adding new companies to its portfolio, diversifying its capabilities, and expanding its reach.

In the last year, the company has added an e-commerce site in the United States, a 60% stake in one of China's largest television media companies, and partial stakes in web browsers and social media sites. The company has bought at least a portion of 11 different companies and spent more than $2 billion in the past 12 months.

Before the acquisition surge, Alibaba operated a network of e-commerce websites in China that operated like Amazon.com (Nasdaq: AMZN), eBay Inc. (Nasdaq: EBAY), and PayPal. Now, it's making strides to be more than just an e-commerce company.

Additionally, these financial reports have pushed the valuation even higher...

In the first nine months of 2013, Alibaba's revenue was up 51% from the previous year to $1.78 billion. Net profit was up nearly 45% from 2012, at $792 million.

The burgeoning nature of China's e-commerce industry doesn't hurt either. According to the research firm McKinsey & Co., e-commerce in China is expected to be a $420 billion industry by 2020, up from $210 billion in 2012. As the largest e-commerce firm in China, no one is set to cash in as much as Alibaba.

And investors are a step closer to getting a piece of this lucrative market...

Alibaba IPO: Company and Banks Begin Prep Work

On Tuesday, Alibaba held a "kick off" meeting in Hong Kong with its lead underwriting banks to formulate a plan for the highly anticipated initial public offering.

The company did not make any formal announcement about the meeting. Presumably company officials and representatives from the underwriting firms began working out financial details of the IPO, including how much money will be raised, the company's value, the share price range, and the IPO date, among other details.

According to Reuters, Alibaba has discussed using Citigroup Inc. (NYSE: C), Credit Suisse Group AG (NYSE: CS), Deutsche Bank AG (NYSE: DB), Goldman Sachs Group Inc. (NYSE: GS), JPMorgan Chase & Co. (NYSE: JPM), and Morgan Stanley (NYSE: MS) as lead underwriters on the deal.

While investors wait for more information from company officials, new estimates about the IPO have been coming in almost every week.

A Wall Street Journal report last week cited sources close to Alibaba who estimated that the IPO could raise up to $15 million. That would put it just behind Facebook for fifth-largest U.S. IPO ever, in terms of money raised.

That's why Alibaba is the most exciting IPO of 2014.

"With Alibaba, investors will be getting a stock that offers a broad play on the world's most populous economy and a mushrooming web sector," Money Morning's Defense & Tech Specialist Michael Robinson said.

Are you interested in investing in the Alibaba IPO? Give us your thoughts on the company on Twitter @moneymorning using #Alibaba.

When it comes to Federal Reserve statements, there is a huge economic indicator that everyone misses...

Source : http://moneymorning.com/2014/03/27/alibaba-ipo-chinese-firms-value-will-easily-beat-record-high/

Money Morning/The Money Map Report

©2014 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in