6/3/2017 Update: Alibaba closed trading on Friday at $124.13 and been on fire for the last six months along with the rest of the market. The last earnings report in May propelled the stock higher as investors were happy with the companies reported numbers. If there is a negative for this stock it is the uncertainty about President Trump and whether he will be as tough on China in his policies as he was in his pre-election rhetoric.
Earlier this year, BABA had the biggest Singles Day ever with almost $18 billion in sales. However, that number showed a growth of only 30% whereas last year’s growth was at 60%. This was seen as a negative and investors continued to sell the stock on Friday.
What was constant news coverage early in 2016 of a China slowdown and fraud from sellers on the Alibaba website has largely died down. These earnings include news of spectacular progress on the mobile side of the company and have given investors much needed positives for this stock going forward.
The biggest IPO of 2014 and of all time was Alibaba. Investors, both novice and experienced, from all over the world were interested in buying the stock and wondering whether they should buy it at the open on the first day or wait for a better price later on. The ticker symbol “BABA” was chosen and it is now listed on the New York Stock Exchange. This came after months of uncertainty and speculation about which exchange (NASDAQ or NYSE) Alibaba would choose.
Alibaba listed 27 names of directors and board members who will manage the company after they go public. You can view the latest filing of paperwork with the SEC here to read all the details. After the first day of trading, Alibaba was worth approximately $170 billion which made it the largest IPO of any Chinese company and actually the biggest IPO ever in America. By comparison, Facebook’s IPO price of $38 valued the company at $104 billion dollars so Alibaba’s exceeded that by a considerable amount.
How To Buy Alibaba Stock And Get The IPO Price
The Alibaba IPO took place on 9/19/2014 and that was the date regular investors were able to buy the stock for the first time. Unfortunately, you had to be friends, family, or some other insider to get any shares before that date. Like all IPO’s, only people with industry connections and very deep pockets had the ability to be able to secure stock shares at the $68 IPO price.
For everyone else, buying the stock on that first day of the iPO was the only option. And now that BABA trades every weekday on the NYSE you need to have an online broker account (I recommend Motif Investing for its low $4.95 fees) and put money in that account before you can buy the stock. Motif Investing is great for a couple of reasons 1) there are no account minimums so you can open an account with any amount of money and 2) you can buy baskets of stocks (called motifs) which allow you to easily diversify and no other broker allows you to do that. ***You must have a Social Security Number and be a resident of the United States in order to open a Motif account***
Buy Alibaba Stock Via Owning YHOO And SFTBY
There are two companies that hold large stakes in Alibaba and you can buy both of them as a possible way to get exposure to Alibaba without actually owning BABA stock. Those two companies are Yahoo (YHOO) which now holds close to a 16.3% stake and SoftBank (SFTBY) which holds about a 33% stake. Obviously, having a large percentage of ownership in Alibaba as these two companies have, the higher the price of Alibaba goes, the more Yahoo and SoftBank stock should theoretically benefit.
Both stocks ran up in the months before Alibaba’s IPO but now that it has taken place, YHOO and SFTBY have stalled and have headed down. Investors might be taking their profit on those two stocks and investing directly in Alibaba. Of course both of those companies have their own businesses and that affects their stock price as well. Buying either Yahoo or SoftBanks is NOT something I am recommending but it is an alternative way to own some Alibaba.
The Alibaba IPO In The Summer Of 2014
Interestingly, one of Alibaba’s competitors (JD.com) went public on May 23, 2014 and had a successful IPO. JD.com’s stock closed up the first trading day and then has lost ground since then but the general consensus is that it was a good IPO and it showed strong demand for the stock.
This IPO was viewed as very positive news for Alibaba as they are a much bigger company than JD but in the same general business. Because JD’s IPO went well, investors hoped that meant there would be even more demand for Alibaba stock, which ultimately proved correct.
Alibaba’s IPO offering garnered an unprecidented amount of interest from the media and investors. The company is a little bit of Amazon, Google, and Ebay all combined into one gigantic Chinese company. Investors worldwide were extremely interested in this IPO and it did live up to all the hype on its IPO day with more than 270,000,000 shares being traded.