Alibaba shares surge 38% on US trading debut
Shares in Alibaba Group soared 38.07% in their first day of trading on August 19, following a $21.8 billion IPO on the New York Stock Exchange (NYSE).
The stock opened at $92.70 and reached a high of $99.70 before paring gains to close at $93.89. Alibaba initially set a range of $60-$68 for a total of 320.1 American Depositary Shares (ADS) but upped it to $66-68 during the road show in response to strong demand from investors. The shares were eventually priced at $68 apiece.
Scott Cutler, head of the NYSE's global listing, told CNBC that underwriters would exercise their option for an additional 48 million shares to bring the IPO's size to about $25 billion, making it the largest IPO in history. A final decision on the overallotment option is expected over the next week or two based on share performance.
The offering represented a significant liquidity event for a string of private equity investors. Silver Lake holds a 2.2% interest post-IPO after selling 4.1 million shares in the offering. Yunfeng capital offloaded 6.5 million shares for $442 million and has a 1.1% stake worth $1.8 billion. CITIC Capital, Boyu Capital, affiliates of Asia Alternatives Management, Temasek Holdings-owned Pavilion Capital and Siguler Guff also made partial exits through the offering.
The biggest seller was Yahoo, selling 121.7 million shares for $8.3 billion and now retains a 16.3% interest in the company. Softbank, one of Alibaba's earliest backers, didn't make a partial exit.
Alibaba is China's leading e-commerce player with platforms covering B2B, B2C and C2C. Its three retail marketplaces - Taobao, Tmall and Juhuasuan - generated a combined gross merchandise value of RMB1.5 trillion ($248 billion) from 231 million active buyers and 8 million active sellers in 2013. Alibaba recorded a net profit of $1.99 billion in the second quarter this year, while it posted of $2.54 billion in revenue, up 46.3% year-on-year.
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