In my blog "Alibaba Storms Wall St." Sept 8th, I described how entrepreneur Jack Ma built China's largest e-commerce company from an idea he had in his apartment a few years ago. The beauty of Alibaba's business plan is its unique structure - it doesn't hold inventory, it doesn't sell products directly; it connects buyers and sellers of all shapes and sizes and provides a conduit for delivery and payment. With the decision to "go public", the company issued an IPO (Initial Placement Offer) selling shares to insiders, friends and a few institutional buyers at $68 a share. That IPO was the largest technology IPO in history.
Last Friday, September 19th, Alibaba debuted as a publicly traded company in New York. It's first trade sold at $92.70 and by the closing bell, finished at $93.89 a share, $26 over the IPO price. Jack Ma was ecstatic. He remarked: "We want to be bigger than Wal-Mart. We hope in 15 years, people say this is a company like Microsoft, IBM, Wal-Mart. They changed, shaped the world". One market analyst described Alibaba this way: "The business model is really interesting. It's not just an eBay. It's not an Amazon. It's not a Pay Pal. It's all of that and much more".
Now that Alibaba has conquered the Chinese market, it plans to expand into emerging markets and then into Europe and America. In terms of size among U.S. - traded technology companies, Alibaba is fourth, behind Apple, Microsoft and Google. Not bad for a light-bulb moment in one man's apartment.
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