Tomahawk, WI 09/19/2014 (Basicsmedia) – Alibaba Group Holding Ltd (NYSE:BABA) priced it’s IPO at the top price range of $68 a share, consequently closing the day with $21 billion in cash. Marking the biggest IPO in history. During an interview on CNBC, Triton Research co-founder, Rett Wallace, argued that the decision to close the IPO at the $68 mark was not based on market value as Alibaba could have tabled a slightly higher price target.
A share price of $68 gave Alibaba a valuation of $167.6 billion making it one of the biggest company in the U.S. The company could increase it’s valuation by selling additional shares. The pricing of the IPO at $68 a share allowed Alibaba Group Holding Ltd (NYSE:BABA) to surpass Amazon.com, Inc. (NASDAQ:AMZN), which was a given a valuation of $150 billion at the time of it’s IPO and eBay Inc. (NASDAQ:EBAY)‘s $66 billion.
“It was a decision one suspects they could have taken more price right; they closed the books earlier on this deal. So deciding not to go over the top-end of the range seems like a decision rather than a market reality and again not surprising to us at all. The biggest question where does it open tomorrow,” said Mr. Wallace.
Alibaba controls a big amount of market-share in China, awaiting to see how things turnout after one year. Alibaba Group Holding Ltd (NYSE:BABA) is already arousing questions as to how far it can continue to grow. Future success will depend on its ability to tap into markets especially in Europe and the U.S considering it is already a dominant force in China.
“[…] ThisCompany is already quite big they have a completely commanding market share of Chinese e-commerce and so the question is, can they keep it and if they own a big piece or control a big piece of the Chinese e-commerce market. The question is how big that market will grow. So that really becomes a market question more than a company question,” said Mr. Wallace.