As per the expectations, Alibaba Group Holding Ltd (NYSE:BABA) received a cheerful welcome from the investors with 38% surge in its share prices to $93.89. IPO of the biggest online retailer of China lead to an exchange of 271 million shares on the first day.
Jack Ma, Founder of Alibaba Group Holding Ltd (NYSE:BABA), founded the company in 1999 and it covers nearly 80 percent of online sales in China. Jack Ma rang the first trading bell on Friday morning to commence the trade of Alibaba’s shares. Stocks of Alibaba opened at $92.70 and soared to $99.70 only to settle down at $93.89 later. Investors exchanged 271 million shares of Alibaba Group Holding Ltd (NYSE:BABA) making it nearly double the total turnover for Twitter Inc. (NYSE:TWTR) last year.
Earlier, Alibaba Group Holding Ltd (NYSE:BABA) raised $21.8 million with its target price of $68.00 and the underwriters might practice their option to trade another 48 million shares to raise up to $25 billion, hence making it the biggest IPO in the history, said Scott Cutler, head of NYSE global listing business.
According to the closing rate on Friday, Alibaba Group Holding Ltd (NYSE:BABA) has a current market capitalization of $231 million getting ahead of the biggest US online retailers, Amazon.com, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY). Alibaba has 39 times forward earnings valuation, which keeps it close to Facebook Inc (NASDAQ:FB) but nowhere close to the 264 times forward earnings valuation of Amazon.com, Inc. (NASDAQ:AMZN).
The founder of Alibaba, Jack Ma, has a personal fortune of $14 billion on papers, which puts him in the category of the richest tech innovators including Bill Gates and Jeff Bezos.
This article has been written by Prakash Pandey.