In a few weeks, the Chinese-owned e-commerce giant Alibaba will be announcing its first ever initial public offer (IPO) in the U.S. This move has raised the anticipation of many investors. In fact, about 100 meetings will be held in different U.S. cities and a total of three continents worldwide to scout for potential shareholders. One question every potential investor is asking is whether it will be worth buying into Alibaba’s IPO.
According to online advertising statistics gathered over the years, all numbers point to the IPO being a possible lucrative venture for any investor. Since its inception, the Chinese e-commerce company has registered remarkable growth to rival that of the largest Internet marketing giants, such as eBay, Amazon and Facebook. There are a number of facts of which every potential shareholder should be aware.
Growth of Alibaba
The 2013 business calendar showed great success in growth and turnover for Alibaba. At the beginning of the year, the Chinese merchant company spent more than $3.5 billion acquiring other online marketing companies during its expansion plan. This paid off since two of its subsidiaries raked in a clean $240 billion in closing sales, which is double what Amazon or eBay has ever handled in one annual sale. Moreover, Alibaba’s popular subsidiary TaoBao is ranked in the top 20 e-commerce websites visited globally. Of all the packages sent to China, a growing economic super power, about 60 percent is handled by Alibaba itself or its subsidiary websites.
There is more to these statistics: Yahoo is one of the biggest investors of the Chinese e-commerce website. Yahoo’s stocks are currently valued at $39.5 billion and about $30 billion of this revenue is from shares held at Alibaba. And with the coming IPO, Yahoo will be required to surrender a portion of its 24 percent ownership of the e-commerce website, which is icing on the cake to investors.
By 2012, Alibaba had garnered more than 36.7 million online users registered to its website, a number that rises constantly each year. About 2.8 million online stores are signed to the website as well, and more than 6,000 products are handled in the site in divided categories. Even though most Americans are yet to hear of this giant e-commerce Chinese site, it is clear that Alibaba is growing bigger, and as a result, a financial prediction has been made that it will be handling in excess of $1 trillion a year in transactions once this IPO goes through.
What does the future look like for an investor participating in this IPO? Even with the millions of users registered to this Chinese e-commerce website, there is still a huge number of potential users from China that have yet to register. With the IPO announcement, Alibaba anticipates to increase its users through sign-ups from the U.S., Europe and targeted Asian countries.
Anticipated IPO Meeting
The anticipated IPO is set for September 3rd and will happen in three continents. Alibaba announced that its top officials would be divided into two groups to tour the three continents, as they scout for potential investors. In the U.S. alone, investors in Boston, Chicago, San Francisco, Los Angeles, Denver and Kansas City will be invited into the IPO meeting. The IPO meetings will also be held in London, Hong Kong and Singapore, where the company’s executives will scout for potential investors. About 100 meetings will be held globally in what is going to be the largest valued IPO in years, even larger than what Facebook launched some years back; the value is estimated at $200 billion against Facebook’s IPO of $104 billion.
Alibaba started as a small merchant website in a Chinese apartment and has grown to employ more than 24,000 workers stationed in China and other places around the world. Today, the Chinese e-commerce website provides a platform for companies to sell directly to consumers (through Tmall) and for consumers to buy and sell from each other (TaoBao).
It is evident that Alibaba’s turnover was stable even before the IPO and it is set to rise even higher after. These are the statistics as they stand and you can pretty much guess what investing in the IPO will mean to your business portfolio.