Jack Ma, Alibaba's founder, celebrated the ringing of the bell from the floor of the New York Stock Exchange on Friday.Credit Mark Lennihan/Associated Press Related Links Alibaba has captured the attention of American investors, politicians and consumers to an extent that's unusual for a company that does much of its business in China.
The company's shares priced at $68 on Thursday, making it one of the biggest initial public offerings in history. Apart from making its insiders rich and providing fees to Wall Street, the initial public offering reflects the rise of China's consumer class. Investors see it as perhaps the best chance yet to buy into the country's growth. The American-based technology giant Yahoo owns a significant stake in Alibaba, helping bolster its own stock price.
As the company begins trading on the New York Stock Exchange this morning, DealBook is taking a look at some of its past milestones, tracking its stock performance and offering analysis on how Wall Street is viewing this behemoth:
11:10 A.M. Stewart: The Numbers Behind Alibaba's StoryAlibaba has a compelling story to tell investors, but the underlying numbers may give some investors pause, James B. Stewart writes in the Common Sense column in The New York Times.
For example, at $68 a share, Alibaba's price-to-earnings ratio is just over 40. EBay, a roughly comparable company, has had an average P/E ratio a little over 26, Mr. Stewart writes:
11:04 A.M. SoftBank Chief's OutlookIn an interview with CNBC, Masayoshi Son, the chief of SoftBank and a director of Alibaba, shared his optimism for the Internet giant, as well as Japan and China's economy:
Credit CNBC
10:37 A.M. Jack Ma on Spending His Billions and Forrest GumpMr. Ma spoke with CNBC immediately following the ringing of the bell at the New York Stock Exchange. He described how he plans to spend his own personal wealth.
Credit Lucas Jackson/Reuters
… compared the infrastructure of commerce in the U.S. verses in China …
Credit Lucas Jackson/Reuters
… and said that his hero is Forrest Gump.
Credit Lucas Jackson/Reuters
10:25 A.M. In China, Alibaba's New Campus Sets Up for a Big Party Photo
A re-creation of the facade of the New York Stock Exchange outside of Alibaba's campus in Hangzhou, China.Credit Sola Ye
Over the course of its 15-year history, Alibaba has struggled to separate itself from a reputation for selling fake products online.
On Friday, the day of its listing, it finally has a fake that will inspire pride: A re-creation of the facade of the New York Stock Exchange.
The structure, which has been put up in the main courtyard of the company's new campus in the eastern Chinese city of Hangzhou, will serve as the center of festivities Friday evening local time, when the company lists in New York.
Though China's state-run companies are usually quite conservative, the mostly private technology sector is anything but, and over the years Alibaba and its co-founder, Jack Ma, have earned a reputation for throwing a good party.
Mr. Ma, who is known to croon karaoke ballads at the company's festivals, was in New York with a group of executives and Chinese reporters for the listing. Still, the company's employees, some of whom will soon be millionaires, will ring in the listing by watching a live feed from New York at the campus.
Despite that, two employees said that the mood on the campus was subdued, with many hard at work on Friday morning.
One employee, who spoke on the condition of anonymity because he was not authorized to speak for the company, said that employees at the campus were generally calm.
"It's not too different from normal," said the person, who has worked for seven years for Alibaba and is a senior information technology engineer.
"It's not as important as the outside world has made it, and we are super busy, like always," he said, adding that light rain in Hangzhou was dampening the mood as well.
Another employee in the company's branding department, Zhao Xiuzhi, said the mood was generally happy, but not overly ecstatic.
"Today we feel quite happy," she said. "Everyone is wearing the same T-shirt, which gives a feeling of having accomplished something together." She added: "Plus, tomorrow's a Saturday so I feel relaxed."
Photos of the white T-shirts the employees received spread widely on social media in China. "One must have dreams" was printed on the front, and "What if they come true?" was on the back.
Ms. Zhao said she felt "tranquil" about the money she would earn and also said she was too busy to think too much about the celebrations that night. "But I do feel lucky, since it is the first time I have a chance to witness one company's I.P.O. event."
In Hong Kong, senior bankers were taking on jobs usually left to junior employees to get in on the action of what was seen as a historic occasion, according to one banker working on the deal who spoke on condition of anonymity.
"All bankers working on this I.P.O. have been demoted a few rungs," the banker said. "You got managing directors doing associate and analyst-level work. It's like the deal has some sort of mystical power over everyone and all are just acolytes at the altar of Jack Ma and Alibaba."
— Paul Mozur and Shanshan Wang
10:15 A.M. Caution on Alibaba's FutureAlibaba is projected by many on Wall Street to perform well on its first day. But anyone thinking of buying into the stock should be mindful of the considerable long-term risks. DealBook's Peter Eavis explored some of the issues. Among them:
* Alibaba's corporate structure is highly opaque. The entity going public, the Alibaba Group, is not based in the United States but in the Cayman Islands. Investors buying into Alibaba will not get a true ownership stake in Alibaba's operating businesses; instead, the Alibaba Group merely has contractual rights to profits from the businesses.
* Alibaba's auditor, PricewaterhouseCooper's affiliate in Hong Kong, is not subject to inspections by the Public Company Accounting Oversight Board, which regulates audit firms.
* Alibaba went on a buying spree in the second quarter, spending a total of $1.85 billion, more than the $1.64 billion in cash flows from the company's operations. Some of the deals raised eyebrows. And after buying a movie production company, Alibaba said that it might have found accounting irregularities at the firm, suggesting it did not adequately vet the deal.
* While the company is dominant today, its future is not certain. Unlike Amazon, Alibaba does not currently consume lots of cash holding inventory, and it has not used up cash to build a fully fledged distribution network. Rivals like JD.com are building their own networks. If Alibaba were to follow suit, it would be a punitively expensive undertaking.
— William Alden
9:46 A.M. Employees and Executives at N.Y.S.E.A huge crowd of Alibaba employees and partners were in a cordoned-off area just under the balcony where eight Alibaba customers were to ring the bell. Among the crowd was Jack Ma, the Internet titan's executive chairman, and Joseph Tsai, the executive vice chairman, both tieless and looking relaxed.
Many of the employees wore white T-shirts with a blue "Tao doll," the mascot of Alibaba's Taobao market, over collared shirts. Selfies and snapshots were taken repeatedly, with the company's general counsel, Timothy Steinert, featured in a few. Michael Yao, the company's head of corporate finance, enthusiastically whipped out his smartphone and snapped some photos.
The pen grew so crowded that minders repeatedly sought to thin the crowd, but to little avail. At one point, the crowd was urged to squeeze in "like in a subway train."
— Michael J. de la Merced
9:42 A.M. Jack Ma on the Floor, Not at the BellCredit Lucas Jackson/Reuters
Jack Ma was the New York Stock Exchange at the market open. But he didn't ring the opening bell.
Eight customers of Alibaba rang the bell on the company's behalf. Alibaba says this shows its "customers first" ethos. It also reflects the importance of the number 8.
The customers include an American farmer, a Chinese delivery courier, an Olympic gold medalist and a customer service representative for Alibaba's Taobao marketplace.
— William Alden
9:28 A.M. Alibaba's Lucky NumbersThere are plenty of important numbers to keep in mind when analyzing Alibaba. But a few stand out: 6, 9 and especially 8.
Consider how many 8's appear in the stock offering. The roadshow for the I.P.O. kicked off the week of Sept. 8. The deal priced on Sept. 18. The price was set at $68 a share.
If you dig into Alibaba's prospectus, there are more 8's, 9's and 6's. The company had 18 founders. Its holding company was established on June 28, 1999 (6/28/99). A credit facility it obtained last year was worth $8 billion.
The pattern is no coincidence. The number 8 is considered lucky in Chinese culture. The word for eight in Mandarin, "ba," rhymes with the word for prosper, "fa." (The Beijing Olympics — in 2008 — began at 8 p.m. on the eighth day of August, the eighth month of the year.)
Alibaba just so happens to contain two "eights" in its name.
Reports this summer said Alibaba was considering scheduling its trading debut for Aug. 8, or 8/8, a date the company saw as auspicious.
But a debut in September, the ninth month, is also significant. The number 9 is considered desirable because it sounds the same as the word for long lasting, "jiu."
The number 6 is popular as well. It can signify longevity or joy, depending on the dialect.
A string of these numbers is even better. Consider, then, the market value Alibaba achieved last night: $168 billion.
— William Alden
9:16 A.M. The Whale of the I.P.O. MarketThe trading debut of Alibaba Group comes at a time when the market for initial public offerings has been robust.
At $21.8 billion, Alibaba's offering is the largest in the United States, topping the I.P.O.s of Visa, Facebook and General Motors. But to really get a sense to how enormous Alibaba is, consider that the market value of the Chinese e-commerce company is nearly as big as the market value of the entire American I.P.O. market so far this year.
With its shares priced at $68 each, Alibaba has a market value of about $168 billion. The combined market value of the 154 companies based in the United States that have already gone public this year is $180.5 billion, says Standard & Poor's Capital IQ, a research firm.
Fully diluted, Alibaba's market value is $176 billion at $68 a share, says Renaissance Capital, an I.P.O research firm. That would make Alibaba among the top 25 most valuable companies listed in the United States, it says.
— Jeffrey Cane
9:06 A.M. Who Got In at the Debut Price?Word is already emerging on who managed to snag shares in Alibaba's I.P.O., and unsurprisingly, the biggest of the big investors prevailed.
The company and its underwriters allocated the vast majority of shares from the offering to "strategic partners" like mutual funds, according to people briefed on the matter. More than 50 percent of the stock went to the biggest accounts, one of these people said.
Behind the allocation, these people said, was a desire to create a solid base of investors willing to stick with the company for the long term.
Doug Kass at Seabreeze Partners says the demand was high for shares:
TD AMERITRADE SAYS CUSTOMER ORDERS FOR ALIBABA EXCEED CUSTOMER ORDERS FOR TWITTER'S IPO BY 2.5 TIMES $BABA
— Douglas Kass (@DougKass) 19 Sep 14
— Michael J. de la Merced
9:00 A.M. How Alibaba Is Set UpWhat exactly will shareholders be buying? Steven Davidoff Solomon, noted in a Deal Professor column that investors in the offering won't have title to most of Alibaba's Chinese assets because of Chinese prohibitions on foreign ownership.
Instead, the company is using a so-called variable interest entity structure. It works for Jack Ma, Alibaba's co-founder and executive chairman, but whether it works for investors remains to be seen, he writes. He also takes a look in this video:
8:44 A.M. Don't Look for Alibaba's Price Right at 9:30 A.M.Alibaba shares aren't expected to start trading for several hours, but the floor of the New York Stock Exchange is already bustling, and brimming with orange from the company's logo. Within the Big Board, screens at various posts — especially at Barclays, the designated market maker — are displaying the bright orange Alibaba logo prominently. The logos of other Chinese companies, like Autohome and Leju.com, dot the screens of other market makers.
I get the sense some company is going public today. #alibaba $baba http://t.co/DX1OEHzLhX
— Michael de la Merced (@m_delamerced) 19 Sep 14
And the chatter around the floor has a distinctly more Chinese flavor. An estimated 140 media teams from the China region have gathered at the Big Board to cover Alibaba's market debut.
The N.Y.S.E. is also going to great lengths to make sure there are no glitches, so the stock won't be trading right at the opening bell:
Credit CNBC
— Michael J. de la Merced
7:39 A.M. The Scene on Wall Street Photo
Jack Ma, executive chairman of Alibaba, arriving at the New York Stock Exchange.Credit Todd Heisler/The New York Times
Jack Ma arriving at the New York Stock Exchange. Dozens of onlookers had gathered early Friday in anticipation of Alibaba's first day of trading.
Photo
The scene outside the N.Y.S.E.Credit Todd Heisler/The New York Times
DealBook's Michael J. de la Merced is at the exchange to follow the debut:
More than a few Chinese visitors stop to have their picture taken in front of the NYSE $baba @ New… http://t.co/0KMoosJZ5V
— Michael de la Merced (@m_delamerced) 19 Sep 14
7:23 AM How the Chinese Feel About AlibabaWith the Alibaba I.P.O. heavily oversubscribed, the world already knows how international and institutional investors feel about the offering. Less emphasis has been placed on what Chinese investors think.
A survey by the Chinese tech media site PingWest of more than 600 Chinese investors found that 59 percent would not invest in the company. Though 66.7 percent of those asked said that they were bullish on Alibaba's long-term growth, 16.1 percent said the price was too high, while 8.6 percent chose the more personal reason: They didn't like Jack Ma and Alibaba.
— Paul Mozur and Shanshan Wang
7:00 A.M. In Hong Kong, Wondering What Might Have BeenHONG KONG — The new Alibaba Group had originally sought to list in Hong Kong. But regulators refused to sign off on its partnership structure, which gives a committee of fewer than 30 of the company's employees and associates majority control over board appointments.
Speaking to potential investors while on a marketing tour in Hong Kong on Monday, Jack Ma asked his audience to "think about us just like any other Internet company that happens to be in China."
In Hong Kong, that's not so easy to do.
— Neil Gough
6:42 A.M. Alibaba.com's Previous I.P.O. Popped, and Fizzled Photo
In 2007, Jack Ma, third from left, had taken Alibaba.com public.Credit Herbert Tsang/Reuters
HONG KONG — This isn't Jack Ma's first trip to the I.P.O. rodeo.
Demand was tremendous back in 2007 when Mr. Ma listed Alibaba.com, a website connecting Chinese exporters with overseas buyers, on the Hong Kong stock exchange. It raised $1.7 billion, a record for an initial public offering by an Internet company in Asia at the time.
Alibaba.com originally offered 129 million shares to individual retail investors and received orders for 33 billion shares. The opening-day pop in the stock was impressive: the shares rose 193 percent on their first day of trading, Nov. 6, 2007 — climbing from an offer price of 13.50 Hong Kong dollars apiece, or $1.74, to 39.50 dollars apiece.
But Alibaba.com came to market near the top of what proved to be a global rally in equities that would turn into a downward spiral a year later, after the collapse of Lehman Brothers.
From a peak of 38.92 dollars just three weeks after its I.P.O., Alibaba.com's stock plunged and never quite recovered. It was languishing below 10 Hong Kong dollars a share in early 2012 when the parent company, the Alibaba Group, offered to take it private at 13.50 dollars a share — which just so happened to be the I.P.O. price.
— Neil Gough
source : http://rss.nytimes.com/c/34625/f/640316/s/3ea0affb/sc/2/l/0Ldealbook0Bnytimes0N0C20A140C0A90C190Clive0Eblog0Etracking0Ethe0Egiant0Ealibaba0Ei0Ep0Eo0C0Dpartner0Frss0Gemc0Frss/story01.htm
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