Alibaba roadshow bodes well for record-breaking IPO
Updated: 2014-09-13 17:37
NEW YORK -- Investors' fever toward the Alibaba Group during its roadshow and all the hype surrounding the Chinese e-commerce behemoth are boding well for its record-breaking initial public offering (IPO) in the US market next week.
"We believe that Alibaba will be a successful IPO. Its proposed price is reasonable, and possibly below where it will ultimately trade," said Kathleen S. Smith, a principal at Renaissance Capital and an IPO ETF manager, in a recent interview with Xinhua.
Alibaba's IPO is expected to be the largest in US IPO history. According to its amended filing to the US Securities and Exchange Commission (SEC), Alibaba and the selling stockholders will offer a total of 320 million American Depositary Shares (ADSs) at an expected price range of between $60 to $66 per ADS, taking the whole size of the IPO to approximately 20 billion dollars, beating that of Visa in 2008 and Facebook in 2012.
Orders to close early over hot demand
Alibaba will close order books ahead of schedule by next Wednesday, as the company has received enough investor demand for its initial public offering within five days of its roadshow, a source confirmed to Xinhua on Friday.
Nicholas Colas, chief market strategist at ConvergEx Group, said that "the short answer is it doesn't seem they (the investors) are overly optimistic." ConvergEx Group is a provider of global agency brokerage and investment technology.
Colas noted that, through the roadshow, investors had a chance to hear the company, read its comprehensive offering documents and compare it to different companies, which was "an education process for everybody."
"So the fact that the demand is there, I don't think it has anything to do with excessive optimism. It seems to be a well-considered, well-researched point of view," he said.
The hot demand is an evidence of investors' optimism about the Alibaba's future and its stock performance after going public.
The company is expected to price its IPO Thursday and begin trading on the New York Stock Exchange the following day under the ticker symbol "BABA."
Mark Otto, Partner/Designated Market Maker at J. Streicher & Co., told Xinhua that the roadshow has gone really well. "It seems on the first couple of meetings they've sold out the shares that they were going to sell to raise $21.1."
Jack Ma impress wall street
Alibaba was founded by Jack Ma in his apartment in 1999. Ma has transformed it in 15 years of time into an online retail giant with an estimated market cap from 155 billion dollars to as high as 220 billion dollars.
"I'm a big fan of Jack Ma," said Otto, who is also a senior trader at the NYSE. "I think he's a little bit flamboyant. Certainly he is a type of person who is going to stand for what he believes in."
|Alibaba's Ma and Ma's private equity firm