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Alibaba's shares shoot up in value on first day of trading


Alibaba's shares shoot up in value on first day of trading


Huge demand for the shares of giant Chinese internet retailer Alibaba caused them to surge to almost $100 each at one stage on their first day of trading in New York.

Internationally Alibaba is not a household name like Amazon and eBay, but in China it is ubiquitous accounting for 80 percent of online sales.

In Hong Kong, analyst Jeff Dorr of J Capital Research told euronews it is not clear how well it will fare against the other top e-retailers even though its domestic sales growth is massive – 40 percent – and about half that internationally.

“If you look at the international segment, it’s more in the high teens to 20 percent growth. At this stage I think it’s really difficult to say how much traction they’re gonna get, just because Amazon and eBay have such strong mind-share with consumers. I anticipate it will be expensive, I think it’s something that we will have to watch in the next three to five years,” Dorr said.

The shares shot up by more 40 percent above the $68 offering price because many investors received fewer than they had hoped for when they bid for them and so had to buy them on the open market.

Alibaba’s IPO – or initial public offering of shares – is the largest in history.

It is expected to make millionaires out of many of the company’s employees.

Alibaba’s founder Jack Ma, a former English teacher, who set it up 15 years ago in his apartment, sees his personal fortune hit $19 billion on paper, putting him alongside such tech billionaires as Microsoft’s Bill Gates and Amazon’s Jeff Bezos.

with Reuters

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