Alibaba Raises $21.8 Billion in Largest U.S. IPO Ever

Alibaba Group founder and Executive Chairman Jack Ma speaks to reporters before an IPO road show at a hotel in Hong Kong Monday, Sept. 15, 2014.

There's a new king of the U.S. IPO market.
The Alibaba Group sold a little more than 320 million shares at a price of $68 each, according to multiple reports. The company raised $21.8 billion from the public offering.
That puts Alibaba well ahead of the $16 billion that Facebook raised from its IPO in 2012 and tops Visa $17.9 billion IPO in 2008, which held the title of largest U.S. IPO. However, it falls a little short of the Agricultural Bank of China, which raised $22.1 billion in the world's largest IPO to date.
Alibaba will have a market cap of about $168 billion, more than double that of eBay's $64 billion market cap and well ahead of Amazon's $150 billion market cap.
The Chinese ecommerce giant previously filed to price its shares between $60-$66, but raised the price range after reportedly receiving strong demand from investors in the leadup to the IPO. Some had expected it might price as high as $70 a share.

Alibaba was founded in 1999 by Jack Ma, a former English teacher, with the goal of helping businesses in China use the Internet to connect with markets abroad. The Alibaba Group, which consists of two big shopping sites (Taobao and Tmall), is now the largest e-commerce service in China.
It generated $2.54 billion in revenue and posted a net income of nearly $2 billion in the June quarter of this year. During that quarter, Alibaba had 279 million active buyers and 8.5 million active sellers.

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Alibaba is expected to use some of the funds from its IPO to expand into the United States and Europe as part of an effort to become a global company. Even before the IPO, though, Alibaba began to extend its reach into markets abroad through a series of significant investments in businesses like Lyft, Tango and ShopRunner.
The Alibaba IPO will also provide a nice windfall to Yahoo, which has a 22.4% stake in the Chinese company thanks to a $1 billion investment in Alibaba in 2005. That should provide Yahoo CEO Marissa Mayer with ample resources for acquisitions. On the other hand, Mayer will no longer be able to count on the Alibaba IPO to boost Yahoo's stock price.
Alibaba stock is set to begin trading on the New York Stock Exchange with the stock ticker "BABA" on Friday.

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