Chinese ecommerce giant just had the biggest flotation in history.
The Chinese ecommerce giant Alibaba has already made history in the largest stock market flotation of all time. The listing on the New York Stock Exchange (NYSE) came after months of hype, with many seeing the company as a potential rival to Amazon and eBay.
After a successful initial public offering (IPO) many will be wondering what the implications are for business both inside and outside China, and what it means for the tech industry in which the firm largely operates. Here is what we know so far.
1) Initial share sales were delayed due to huge demand
It’s possible that the listing of Alibaba was the most vaunted IPO in world history, and not merely because of the eventual volume. In the longest delay in NYSE history the firm’s banks struggled to find any sellers for two hours after trading had opened.
2) Market capitalisation is bigger than Facebook and Amazon
The closing price of shares on Friday left Alibaba with a market value of more than $231bn, a greater amount than the current value of its two American ecommerce rivals Amazon ($153bn) and eBay ($65bn) combined, and also higher than Facebook’s current value of $202bn.
3) The company has been on an acquisition spree
Leading up to its IPO Alibaba had become China’s most acquisitive company, having spent $4.6bn this year on a range of companies. Like many tech firms it is intent on expanding into many markets, with many of this year’s purchases based around online broadcasting and multimedia.
4) IPO could herald more Chinese firms to list American
Alibaba’s initial desire was to enlist on the Hong Kong stock exchange (HKEx), but regulations would have forced the company to abandon its executive structure. The triumphant IPO is expected to entice more Chinese firms abroad, particularly with the allure of greater expansion in North America and Europe.
5) One of the company’s bigwigs left shortly before IPO
Lakeside Partners is a body of 27 with the exclusive right to nominate the board of directors following the IPO, and one of the key reasons for moving the listing away from Hong Kong. The members of the group were only revealed in June, but an IPO prospectus released in May listed 28 anonymous members, meaning an unidentified person left for reasons unknown.
6) Yahoo gained $3bn from the listing
The search engine Yahoo has had an investing partnership with Alibaba since 2005, with the Chinese version of the search engine bought by Alibaba at the same. Yahoo is thought to have gained around $3bn from the listing, despite having sold half its stake in the company in 2012.
7) Jack Ma may depart from mainland China
Alibaba’s executive chairman Jack Ma told reporters of his disappointment in failing to list in Hong Kong shortly after the deal fell through, adding: "I speak from my heart. I love Hong Kong." In October of last year he had intimated that he planned on applying to a talents programme to move to the city, and may even retire there.
8) …and he is now China’s richest man
Ma’s net worth now stands in excess of $16bn – a decent amount for a former English teacher. Selling shares earnt him $800m in cash, which may rise even further as extra stock options are exercised. In another symbolic victory it also places him in the world’s top 10 richest techies, alongside the likes of Microsoft’s Bill Gates, Oracle’s Larry Ellison and Facebook’s Mark Zuckerberg.
9) Deals held back from stock market will be released
With the hype surrounding Alibaba’s IPO many financial advisers warned their clients against listing, as attention was unsurprisingly focused on the Chinese giant. With the deal out of the way many will press ahead with their plans, including the likes of Citizen’s Financial, owned by the Royal Bank of Scotland (RBS), and Richard Branson’s Virgin America.
10) The IPO has also created Japan’s richest man
Tensions between Japan and China may have increased in recent years, but that has not stopped Japanese telecoms firm SoftBank from buying 34% of Alibaba. Even in the run up to the IPO shares of SoftBank boomed, leaving the firm’s chief executive Masayoshi Son worth $16.6bn, a figure that will have only risen over the weekend.