Alibaba Group Holding Ltd. surpassed Facebook Inc. by market capitalization on its first trade as a public company for a valuation of more than $200 billion.
Alibaba reached $228.5 billion in market value after surging 36 percent above its initial public offering price to $92.70 per share. The Chinese e-commerce company now trails only Google Inc.,Apple Inc. and Microsoft Corp. in size among U.S.- traded technology companies. Facebook, the world’s largest social network, passed $200 billion in market value earlier this month and is worth $199.3 billion today.
Alibaba’s public-market debut contrasts with Facebook’s May 2012 sale on the Nasdaq exchange, which was plagued with technical snafus on top of investor skepticism about the company’s strategy for making money via advertising on mobile devices. Facebook, which was valued at $104 billion at its IPO, lost half its value in the following months, and the stock took more than a year to close above its IPO price.
Alibaba’s $21.8 billion sale was the biggest-ever IPO for a technology company, buoyed by growth in China’s e-commerce market. With an IPO price of $68 a share, Alibaba was valued at 29 times expected earnings for the year through March — below multiples fetched by Chinese and U.S. rivals including Tencent Holdings Ltd., Baidu Inc., and Amazon.com Inc. Analysts forecast that Alibaba’s earnings will grow 50 percent in fiscal 2015 from the previous 12 months.
By PUI-WING TAM & SARAH FRIER September 19, 2014 in Bloomberg