10 ms·

Alibaba Raises $21.8B in Initial Public Offering

213 points by SuperKlaus 12y ago

aresant 12y ago
"[Yahoo] will have raised nearly $8.3 billion through the offering" If I'm reading that right Yahoo stands to triple their cash position almost overnight which today stands at around $4b.(1) Given Marissa Meyer's appetite for acquisitions this puts them into a potentially interesting new ballpark of scale. (1) http://finance.yahoo.com/q/bs?s=yhoo http://finance.yahoo.com/q/bs?s=yhoo
- RSASecure 12y ago
  You would have to consider the after-tax amount, which is going to be a bit less...around $5-6 billion.
  - dmix 12y ago
    They could buy an Instagram or two.
    - subdane 12y ago
      They should buy Buzzfeed
      - BukhariH 12y ago
        This a pretty solid recommendation. Mayer has pivoted yahoo strongly towards content and BuzzFeed is pretty much the most solid content start up out there right now. It sounds like an obvious purchase.
        cylinder 12y ago
        You judge a merger by how the combination will unlock new value. Just because the business models are similar doesn't necessarily mean it's a good acquisition. I don't see how BuzzFeed can benefit with Yahoo other than perhaps accessing its ad sales network?
bane 12y ago
Gosh....that's barely more than WhatsApp. Woulda done better selling it to Facebook. More seriously, the Economist put a valuation at $55-$120b. This puts it at $168b. Or 9 WhatsApps. The IPO was expected to raise $20b, so this is really good. It took 3 years after founding in 1998 to reach profitability. It defies most conventional notions of a startup, despite having started in somebody's apartment. It's unbelievably unfocused, it does pretty much every kind of business you can do on the Internet. It might be one of the first Asian-style conglomerates to be born on the Internet. There are plans for it to open brick and mortar stores. https://en.wikipedia.org/wiki/Alibaba_Group https://en.wikipedia.org/wiki/Alibaba_Group
- xux 12y ago
  >It defies most conventional notions of a startup... It's unbelievably unfocused, it does pretty much every kind of business you can do on the Internet. It defies the Silicon Valley notion of startup. China's internet market is still new, and Alibaba is like Yahoo in the old days - it does everything online. Hopefully it doesn't turn out like Yahoo.
  - samstave 12y ago
    It sells more product than both ebay and amazon combined.
    - adventured 12y ago
      While we're having fun with numbers that don't make much sense to compare given the differences in businesses... Apple generates ~1,000% more net income than Alibaba (projected 2014). Amazon has about ~900% more revenue than Alibaba. Apple has about ~2,000% more revenue than Alibaba. eBay does 100% more in revenue than Alibaba
      - theklub 12y ago
        Crazy part is how much illegal stuff they sell. (knockoffs and fakes)
vrama 12y ago
Yahoo can buy 30 tumblrs with the alibaba money. That's neat.
skuhn 12y ago
Alibaba going for a higher selling price just makes the continued undervaluing of Yahoo itself increasingly hilarious. At some point, I would think someone will want to buy them for all of this free money they have sitting around. YHOO market cap : 42.3bn + liabilities : 3.7bn = 46bn (to own outright) Meanwhile: Cash on hand = 1.1bn + Other assets = 15.3bn + Cash from Alibaba sale = 8.3bn + Value of remaining Alibaba stock = 22bn + Value of Yahoo Japan stock = 9bn = 55.7bn (of value, if you can unlock it) So simply by buying them, firing everyone and selling everything in a firesale, without even cashing those checks from advertisers, you can make $9.7bn. Seems like a sweet deal.
- jarsin 12y ago
  I'm in someone give me a $46Bn loan!
- dragonwriter 12y ago
  You are kind of assuming that you can have a "firesale" that realizes the full current market value of the $31 billion in Alibaba and Yahoo Japan stock. That's somewhat improbable.
  - skuhn 12y ago
    True, this is very naive and presumes you can sell everything for their accounting values without moving the market price or people realizing what you're doing. However, $17bn is a pretty big window of error, and this isn't even taking into account the crazy notion that you could keep running the actual business. It has revenues of $1bn a quarter, nothing to sneeze at.
    - dragonwriter 12y ago
      > However, $17bn is a pretty big window of error Is it? Sell everything else at accounting value and realize a little under half price on the combined Y! Japan and Alibaba stock, and suddenly you are merely breaking even. > and this isn't even taking into account the crazy notion that you could keep running the actual business. It has revenues of $1bn a quarter, nothing to sneeze at. Revenues aren't profits. And Yahoo's net income is all over the map ($1.37B in 2013, $3.95B in 2012, $1.05 in 2011) -- there's no clear trend in the value of running the business, and I think one of the reasons Yahoo stock is so apparently undervalued given a simplistic look at assets and liabilities is the market doesn't really think Yahoo! has much of a roadmap for running the actual business.
jacoplane 12y ago
Planet Money had a decent piece on Alibaba recently: http://www.npr.org/blogs/money/2014/09/03/345310125/episode-565-the-story-of-alibaba http://www.npr.org/blogs/money/2014/09/03/345310125/episode-...
baddox 12y ago
> Though it did not claim the title of biggest initial public offering ever, Alibaba will still lay claim to having held one of the biggest stock sales on record, surpassing offerings from Facebook and General Motors. If you're curious (I was), Wikipedia puts the Agricultural Bank of China as the largest IPO, with Facebook at number 6. http://en.wikipedia.org/wiki/Initial_public_offering#Largest_IPOs http://en.wikipedia.org/wiki/Initial_public_offering#Largest...
- marco1 12y ago
  Yet it was America's biggest IPO to date, right before Visa Inc. with $19.7B. The other three went public in China (Hong Kong Stock Exchange).
dave1619 12y ago
Here's a link to the Alibaba IPO Roadshow Presentation, https://www.youtube.com/watch?v=sa9R2SqZsHM https://www.youtube.com/watch?v=sa9R2SqZsHM I highly recommend watching it. To save time, watch it on Chrome at 2x speed.
- imjk 12y ago
  Sorry, how do you watch it at 2x speed on in Chrome?
  - karanbhangui 12y ago
    1. Enable HTML5 at http://youtube.com/html5 http://youtube.com/html5 2. Click the gear icon in the bottom right of the player and change selection in the "Speed" dropdown
  - iMuzz 12y ago
    request HTML 5 player through Youtube. https://www.youtube.com/html5?gl=BE https://www.youtube.com/html5?gl=BE P.S. You could easily google this!
pstrateman 12y ago
This seems like a pretty bad deal for foreign investors. http://www.forbes.com/sites/investor/2014/09/15/four-reasons-to-avoid-the-alibaba-ipo/ http://www.forbes.com/sites/investor/2014/09/15/four-reasons...
- saym 12y ago
  I don't know why more people aren't talking about this. The Motley Fool guys went over this in their podcast yesterday. I'm in full agreement. http://marketfoolery.libsyn.com/marketfoolery-09182014 http://marketfoolery.libsyn.com/marketfoolery-09182014
piettro22 12y ago
Well....you guys have to look at the bigger picture: Alibaba was rejected by HK stock market the first time around, then Jack decided to take it to NYSE. Of course 21B is nothing in comparison to the other big brothers like Facebook, but ask yourself this question: what really is Alibaba doing in China? For one, Alibaba is about trading on the international scene, and its seed Taobao is like eBay China version; then they are into car manufacturing as well, not to mention Alipay being the paypal of modern day China....clearly, that 21B he raised can't even cover a lot of the expenditures for development. What Jack really is doing is to get his company that global recognition. Any of you can name ONE brand/company that based in China on top of your head? Well, that's what Jack is trying to do. You think he's unfocused? How about this: for someone who owns the e-commerce platform of the world's 3rd biggest country, he is utterly focused on becoming "China's international brand." Don't forget, China is the jumping board, and Jack is the pioneer. Once he claimed first, who will remember the ones from the subsequent ranks?
deleted 12y ago
[deleted]
lurkylurk 12y ago
A bit off topic: Is there a good site to keep track of all tech IPOs and including historical data and upcoming/withdrawn IPOs?
- e15ctr0n 12y ago
  Professor Jay Ritter of the University of Florida is a subject matter expert in this area: http://bear.warrington.ufl.edu/ritter/ipodata.htm http://bear.warrington.ufl.edu/ritter/ipodata.htm
- vbs_redlof 12y ago
  http://www.nasdaq.com/markets/ipos/ http://www.nasdaq.com/markets/ipos/ Includes withdrawn, priced and filed IPOs. Very clean data, straight from SEC Edgar filings.

213 points by SuperKlaus 12y ago

"[Yahoo] will have raised nearly $8.3 billion through the offering" If I'm reading that right Yahoo stands to triple their cash position almost overnight which today stands at around $4b.(1) Given Marissa Meyer's appetite for acquisitions this puts them into a potentially interesting new ballpark of scale. (1) http://finance.yahoo.com/q/bs?s=yhoo http://finance.yahoo.com/q/bs?s=yhoo

RSASecure 12y ago
You would have to consider the after-tax amount, which is going to be a bit less...around $5-6 billion.
- dmix 12y ago
  They could buy an Instagram or two.
  - subdane 12y ago
    They should buy Buzzfeed
    - BukhariH 12y ago
      This a pretty solid recommendation. Mayer has pivoted yahoo strongly towards content and BuzzFeed is pretty much the most solid content start up out there right now. It sounds like an obvious purchase.
      - cylinder 12y ago
        You judge a merger by how the combination will unlock new value. Just because the business models are similar doesn't necessarily mean it's a good acquisition. I don't see how BuzzFeed can benefit with Yahoo other than perhaps accessing its ad sales network?

bane 12y ago

Gosh....that's barely more than WhatsApp. Woulda done better selling it to Facebook. More seriously, the Economist put a valuation at $55-$120b. This puts it at $168b. Or 9 WhatsApps. The IPO was expected to raise $20b, so this is really good. It took 3 years after founding in 1998 to reach profitability. It defies most conventional notions of a startup, despite having started in somebody's apartment. It's unbelievably unfocused, it does pretty much every kind of business you can do on the Internet. It might be one of the first Asian-style conglomerates to be born on the Internet. There are plans for it to open brick and mortar stores. https://en.wikipedia.org/wiki/Alibaba_Group https://en.wikipedia.org/wiki/Alibaba_Group

xux 12y ago
>It defies most conventional notions of a startup... It's unbelievably unfocused, it does pretty much every kind of business you can do on the Internet. It defies the Silicon Valley notion of startup. China's internet market is still new, and Alibaba is like Yahoo in the old days - it does everything online. Hopefully it doesn't turn out like Yahoo.
- samstave 12y ago
  It sells more product than both ebay and amazon combined.
  - adventured 12y ago
    While we're having fun with numbers that don't make much sense to compare given the differences in businesses... Apple generates ~1,000% more net income than Alibaba (projected 2014). Amazon has about ~900% more revenue than Alibaba. Apple has about ~2,000% more revenue than Alibaba. eBay does 100% more in revenue than Alibaba
    - theklub 12y ago
      Crazy part is how much illegal stuff they sell. (knockoffs and fakes)

vrama 12y ago

Yahoo can buy 30 tumblrs with the alibaba money. That's neat.

skuhn 12y ago

Alibaba going for a higher selling price just makes the continued undervaluing of Yahoo itself increasingly hilarious. At some point, I would think someone will want to buy them for all of this free money they have sitting around. YHOO market cap : 42.3bn + liabilities : 3.7bn = 46bn (to own outright) Meanwhile: Cash on hand = 1.1bn + Other assets = 15.3bn + Cash from Alibaba sale = 8.3bn + Value of remaining Alibaba stock = 22bn + Value of Yahoo Japan stock = 9bn = 55.7bn (of value, if you can unlock it) So simply by buying them, firing everyone and selling everything in a firesale, without even cashing those checks from advertisers, you can make $9.7bn. Seems like a sweet deal.

jarsin 12y ago
I'm in someone give me a $46Bn loan!
dragonwriter 12y ago
You are kind of assuming that you can have a "firesale" that realizes the full current market value of the $31 billion in Alibaba and Yahoo Japan stock. That's somewhat improbable.
- skuhn 12y ago
  True, this is very naive and presumes you can sell everything for their accounting values without moving the market price or people realizing what you're doing. However, $17bn is a pretty big window of error, and this isn't even taking into account the crazy notion that you could keep running the actual business. It has revenues of $1bn a quarter, nothing to sneeze at.
  - dragonwriter 12y ago
    > However, $17bn is a pretty big window of error Is it? Sell everything else at accounting value and realize a little under half price on the combined Y! Japan and Alibaba stock, and suddenly you are merely breaking even. > and this isn't even taking into account the crazy notion that you could keep running the actual business. It has revenues of $1bn a quarter, nothing to sneeze at. Revenues aren't profits. And Yahoo's net income is all over the map ($1.37B in 2013, $3.95B in 2012, $1.05 in 2011) -- there's no clear trend in the value of running the business, and I think one of the reasons Yahoo stock is so apparently undervalued given a simplistic look at assets and liabilities is the market doesn't really think Yahoo! has much of a roadmap for running the actual business.

jacoplane 12y ago

Planet Money had a decent piece on Alibaba recently: http://www.npr.org/blogs/money/2014/09/03/345310125/episode-565-the-story-of-alibaba http://www.npr.org/blogs/money/2014/09/03/345310125/episode-...

baddox 12y ago

> Though it did not claim the title of biggest initial public offering ever, Alibaba will still lay claim to having held one of the biggest stock sales on record, surpassing offerings from Facebook and General Motors. If you're curious (I was), Wikipedia puts the Agricultural Bank of China as the largest IPO, with Facebook at number 6. http://en.wikipedia.org/wiki/Initial_public_offering#Largest_IPOs http://en.wikipedia.org/wiki/Initial_public_offering#Largest...

marco1 12y ago
Yet it was America's biggest IPO to date, right before Visa Inc. with $19.7B. The other three went public in China (Hong Kong Stock Exchange).

dave1619 12y ago

Here's a link to the Alibaba IPO Roadshow Presentation, https://www.youtube.com/watch?v=sa9R2SqZsHM https://www.youtube.com/watch?v=sa9R2SqZsHM I highly recommend watching it. To save time, watch it on Chrome at 2x speed.

imjk 12y ago
Sorry, how do you watch it at 2x speed on in Chrome?
- karanbhangui 12y ago
  1. Enable HTML5 at http://youtube.com/html5 http://youtube.com/html5 2. Click the gear icon in the bottom right of the player and change selection in the "Speed" dropdown
- iMuzz 12y ago
  request HTML 5 player through Youtube. https://www.youtube.com/html5?gl=BE https://www.youtube.com/html5?gl=BE P.S. You could easily google this!

pstrateman 12y ago

This seems like a pretty bad deal for foreign investors. http://www.forbes.com/sites/investor/2014/09/15/four-reasons-to-avoid-the-alibaba-ipo/ http://www.forbes.com/sites/investor/2014/09/15/four-reasons...

saym 12y ago
I don't know why more people aren't talking about this. The Motley Fool guys went over this in their podcast yesterday. I'm in full agreement. http://marketfoolery.libsyn.com/marketfoolery-09182014 http://marketfoolery.libsyn.com/marketfoolery-09182014

piettro22 12y ago

Well....you guys have to look at the bigger picture: Alibaba was rejected by HK stock market the first time around, then Jack decided to take it to NYSE. Of course 21B is nothing in comparison to the other big brothers like Facebook, but ask yourself this question: what really is Alibaba doing in China? For one, Alibaba is about trading on the international scene, and its seed Taobao is like eBay China version; then they are into car manufacturing as well, not to mention Alipay being the paypal of modern day China....clearly, that 21B he raised can't even cover a lot of the expenditures for development. What Jack really is doing is to get his company that global recognition. Any of you can name ONE brand/company that based in China on top of your head? Well, that's what Jack is trying to do. You think he's unfocused? How about this: for someone who owns the e-commerce platform of the world's 3rd biggest country, he is utterly focused on becoming "China's international brand." Don't forget, China is the jumping board, and Jack is the pioneer. Once he claimed first, who will remember the ones from the subsequent ranks?

deleted 12y ago

[deleted]

lurkylurk 12y ago

A bit off topic: Is there a good site to keep track of all tech IPOs and including historical data and upcoming/withdrawn IPOs?

e15ctr0n 12y ago
Professor Jay Ritter of the University of Florida is a subject matter expert in this area: http://bear.warrington.ufl.edu/ritter/ipodata.htm http://bear.warrington.ufl.edu/ritter/ipodata.htm
vbs_redlof 12y ago
http://www.nasdaq.com/markets/ipos/ http://www.nasdaq.com/markets/ipos/ Includes withdrawn, priced and filed IPOs. Very clean data, straight from SEC Edgar filings.