The debut of Alibaba Group Holding’s shares on the stock market was met with nothing short of exuberance, as the shares zoomed up by an impressive 38 percent on the very first day of trading. This occurred on a Friday, and spectators across the globe watched as investors clamored for a stake in what seems to be one of the largest Initial Public Offerings (IPOs) in world history. Investors ostensibly saw a golden opportunity to tap into the growing wealth of China’s burgeoning middle class via their bets on Alibaba.
The giant e-commerce platform, hailing from China, was founded in the unlikely setting of Jack Ma’s apartment in 1999. Today, the company is a tour de force in the digital marketplace, commanding a sizable 80 percent of all online sales in China. This remarkable rise, seemingly straight out of a startup fairytale, is a testament to the tenacity and vision of Ma and his team.
The trading day saw some notable moments, with roughly a hundred individuals thronging outside the New York Stock Exchange at Wall and Broad Streets. Among those cheering and capturing memento pictures were Chinese tourists when Ma, accompanied by the martial arts superstar Jet Li, stepped outside the building.
The price of Alibaba’s stock opened at $92.70 shortly before noon ET. The price kept rising to reach a record high of $99.70. However, it pared gains later in the day, closing at $93.89. An approximated 271 million shares were traded that day, nearly doubling the turnover from Twitter’s debut the previous year.
“This is the most anticipated event I’ve ever experienced in my 20-year career on the floor of the NYSE,” states Mark Otto, partner with J. Streicher & Co. He confidently asserts, “I think today’s move is sustainable: The company is profitable, unlike some of its competitors, and it’s a window for traders to tap into the Chinese growth narrative.”
Originally priced on Thursday, the IPO raised a breathtaking $21.8 billion for Alibaba. According to Scott Cutler, head of the New York Stock Exchange’s global listing business, underwriters are expected to exercise their option for an additional 48 million shares, pushing the IPO’s value to approximately $25 billion.
On the domestic front, Alibaba may not be a household name among Americans yet but it has an indomitable presence in China. The company, which runs China’s largest Internet shopping destination, Taobao, and other online commerce platforms, saw a commendable increment of $2 billion in its earnings during the 12 months leading up to March 31, 2014.
As of the closing share price on its debut Friday, Alibaba boasted a market value of $231 billion, outstripping the combined market capitalizations of Amazon and eBay, the United States’ leading e-commerce entities.
Stephen Massocca, a director at Wedbush Equity Management in San Francisco, compares the future trajectory of Alibaba to “uncharted territory,” stating that it is challenging to predict whether the shares will trade on their true fundamental values or whether Alibaba will transform into a “cult stock.”
“It’s very difficult to see what bucket these guys will fall into,” added Massocca. His estimation suggests that there is a high likelihood of the company’s shares experiencing further growth. Despite his bullish forecast, he considers the shares slightly overvalued based on Alibaba’s fundamental valuation.
After the initial euphoria of the successful market debut, media and market pundits are now debating the sustainability of Alibaba’s growth. Their predictions, however, remain divided, and only time will ascertain the trajectory of Alibaba’s shares.
The stunning success of Ali Baba’s IPO not only boosted Jack Ma’s personal worth but also made millionaires of many Alibaba employees, including its managers and software engineers. The company’s historic debut has sparked curiosity and excitement globally about the future potential of this Chinese technological giant.
*This article was updated in 2025 to reflect modern realities.*
I am Martin Odinuwe, a logo identity designer, Graphic designer, Video editor and a professional videographer based in Abuja, Nigeria with over five years experience. I am currently a consultant with Reachout Multiservice company ltd a multimedia company in Abuja
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