It looks like Alibaba Group Holding Ltd (NYSE:BABA) has a box full of fortune cookies with its every single investment receiving excellent response from the market. In the latest string of accomplishments, Momo Inc (ADR) (NASDAQ:MOMO), chat app backed by Alibaba, witnessed 26% increase in its share price on its initial public offering.
Momo Inc did set a reasonable price for its shares, $13.50, but the prices surged after a few hours of trading. The tech company generated $216 million in its IPO. Alibaba Group Holding Ltd (NYSE:BABA) invested $100 million in the company in November 2012 and Momo is now looking to add the ecommerce giant as its advertising partner.
Momo Inc (ADR) (NASDAQ:MOMO) is planning a private placement for the ecommerce giant and 58.com Inc., classified advertising site, and it is likely to reach $50 million for Alibaba and $10 million for 58.com. Under this IPO, the chat company offered 16 million shares to the investors and the company is currently valued at $2.52 billion.
At the end of September, Momo Inc (ADR) (NASDAQ:MOMO) had 180 million registered users and 60.2 million monthly active users.
Alibaba Group Holding Ltd (NYSE:BABA) has 20.7% stake in the company and while commenting upon the CEO of Momo being under legal allegations, Alibaba spokesperson added, “There is no merit to these claims. Momo is a young growing company and Alibaba Group fully supports its management team.”
Earlier this week, Alibaba Group Holding Ltd (NYSE:BABA’s Tmall announced online storefronts for global brands allowing them to sell products to the Chinese customers. Tmall platform is among the biggest ecommerce platforms of the country processing nearly 50 percent, $300 billion, online sales in China. It has over 70,000 registered sellers marketing and selling products from different brands.
This article has been written by Prakash Pandey.