Alibaba raises over $21 billion, making it the biggest IPO ever in the US

Alibaba logoWhen Alibaba stopped trading its shares on Friday, the Chinese e-commerce company had officially logged the biggest Initial Public Offering (IPO) in US history, raising $21.8 billion in its first day on the New York Stock Exchange. The company's earnings give it a market capitalization of over $200 billion, "putting it among the 20 biggest companies by market cap in the US," the Wall Street Journal notes.

The company, which is an e-commerce site that makes a large bulk of its money selling services and advertising, is often compared to Amazon and eBay, although they are not generally direct competitors. As many Ars commenters pointed out in our last story on Alibaba, this NPR Planet Money story goes a long way in explaining the nature of Alibaba’s business—basically, Alibaba is known for making it easy to buy almost anything from manufacturers in China online, and directly from the manufacturer, at that.

Alibaba raises over $21 billion, making it the biggest IPO ever in the US

The Wall Street Journal notes that many investors were not able to buy shares on the first day. About half of the shares were sold to 25 investment firms. "That's unusually concentrated for a deal of this size, said a banker familiar with the process,” the WSJ notes. Sources also say that most of the shares went to US investors.

Now, many investors will wait to see if that price holds in the coming days and weeks. Facebook and Twitter both faced stock tumbles soon after their IPOs, and CBS news notes that value investors may hold off to see if a lower price can be had before they buy in.

Source: Ars Technica

Tags: Internet

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