Second Alibaba IPO in Rally
Jack Ma knows how to time an initial public offering.
The 49-year-old former school teacher preparing to list Alibaba Group Holding Ltd. during a record rally for U.S. stocks did the same thing seven years ago, when Alibaba.com Ltd. went public in Hong Kong a week after the Hang Seng Index hit an all-time high. By the end of 2008, the gauge had slumped 55 percent and the company lost more than $20 billion in market value.
Ma ended up delisting the Hong Kong-traded business-to-business marketplace in 2012 at its IPO price after more than 2,300 vendors used the website to defraud buyers and as stocks languished almost 40 percent below the 2007 peak.
“For Alibaba.com, the timing of the listing was at a market peak so that’s why the performance was disappointing,” said Alex Wong, Hong Kong-based asset-management director at Ample Capital Ltd., which oversees about $150 million.
The Nasdaq Composite Index climbed to the highest since March 2000 on Aug. 29, while the Standard & Poor’s 500 Index hit a fresh record and a gauge of Chinese stocks in the U.S. traded near a three-year high.
Alibaba, China’s biggest e-commerce company, provides a digital marketplace that sells everything. “The new Alibaba is playing in a much bigger market,” said Rex Chen, a Des Moines, Iowa-based analyst at RS Investment Management Co., which oversees about $25 billion. “It’s much more focused in consumer-related commerce. The old Alibaba.com that was listed in Hong Kong was business-to-business, so that was very different.”
Source: bloomberg
