On Friday Chinese Internet company Alibaba floated on the New York Stock Exchange (NYSE). The stock opened at US$68. After five hours of frenzied trading it closed 38% up at $93.89, breaking through $100 at one stage. The company is now valued at US$231 billion.
That is more than Amazon, eBay and Facebook combined. Think about it.
The start of trading was delayed in chaotic scenes as hundreds of investors tried to get in on the float but missed out. Most of the shares went to existing investors. One media outlet reported an investor who placed an order for US$20 million in stock being allocated just US$200,000.
Founder Jack Ma says he gets his inspiration from the movies Forest Gump. In an interview with CNBC after the float Ma said he is inspired by the movie Forrest Gump, and had watched the movie more than ten times. “Every time I’m frustrated, I watch the movie. I watched it again before I came here today. It tells me that no matter what changes, you are you.”
Ma may be Ma, but the float has also made him China’s richest man, with his Alibaba shares now worth nearly US$19 billion. Ma, then a Hangzhou English teacher, founded the company in his one bedroom flat 1998, as a way of connecting Chinese manufacturers with international markets.
It grew quickly to expand into providing goods for China’s massive domestic market, and now controls 80% of all online commerce in China. It is increasingly becoming a global force.
Ma rang the bell at the NYSE to open trading Friday morning. “We have a dream,” he said. “In the next 15 years we hope the world changes because of us. We want people say this is a company like Microsoft, IBM or Walmart. They changed, and shaped the world. We want to be bigger than Walmart.”
Also made filthy rich by the float is Yahoo, which bought into Alibaba early and sold US5 billion of stock on Friday to capitalise on its position. Japan’s Softbank, owned by ‘Japan’s Bill Gates’ Masayoshi Son, also made US$6.4 billion on the float.