Alibaba becomes world’s largest IPO, but stock dives

It’s official: Alibaba is the world’s largest IPO.

The title was pretty much in the bag on Friday, when the Chinese Internet juggernaut raised $21.8 billion in a blockbuster public debut, and was on its way to $25 billion after the New York Stock Exchange said the underwriting banks would sell additional shares. On Monday, the company announced that underwriters had indeed exercised the option to purchase an additional 48 million shares at the $68 IPO price, which sealed the deal: The largest IPO in history belongs to Alibaba, a China-based e-commerce giant that is often described as a combination of eBay and Amazon (but bigger).

In raising $25 billion, Alibaba’s IPO surpassed the 2010 public offering from the Agricultural Bank of China, which raised $22.1 billion in its debut on the Hong Kong Stock Exchange. The previous top IPO in the U.S. was a $19.7 billion deal by Visa in 2008.

Despite all the superlatives and record-breaking activity, Alibaba didn’t look quite so hot on Monday, its second day trading on the New York Stock Exchange. Shares closed down more than 4 percent to $89.89, a$4 per-share dip from Friday’s closing price. And Yahoo, which was the second-largest shareholder in Alibaba and raised about $9 million by selling shares in the IPO, also didn’t perform so well. Yahoo stock fell about 5.6 percent, suggesting that investors are uncertain how CEO Marissa Mayer might use the cash to turn around the floundering company.

In other IPO news, financial app developer Yodlee on Monday set the terms for its much-watched IPO. The Redwood City-based company plans to raise $75 million by offering 6.3 million shares at a price range of $11 to $13. At the high end of the range, Yodlee would raise nearly $82 million.

Yodlee, which was founded in 1999, makes cloud-based apps for financial institutions to help consumers and small business owners with personal money management.  The company ‘s revenue was about $41 million for the first six months this year, and profits were $2 million. It plans to list on the NASDAQ under the symbol YDLE and begin trading next week.

 

Photo: Traders work on the floor of the New York Stock Exchange prior to Alibaba Group’s initial price offering  on September 19, 2014 in New York City. By Andrew Burton/Getty Images.

 

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  • Do you remember FB? Buy it!

  • Willie M.

    I don’t know how they intend to spend that money, and I wouldn’t believe what they said if they said it …

    Thanks to the KochSuckers in the GOP and the clowns in the Tea Party, they will probably dump a boatload into …

    Our upcoming elections thanks to the Citizens United decision that was “blown past” the members of the Supreme Court …

    These Chinese are “citizens”, to be sure …

    They are citizens of China.

    • Willie M.

      Apparently my initial comment is “awaiting moderations” ….

      That’s “Newspeak” for censorship …

      • Hi Willie —

        We’re not monitoring for comments 24/7 on this blog, as the Silicon Beat writers are also Mercury News reporters juggling lots of print deadlines, so I’m sorry it took a few hours to approve your comment. No one is censoring you; we invite your conversation and appreciate reader interaction. We just don’t have anyone dedicated to approving comments around-the-clock so sometimes there is a bit of delay.

  • tatiana peddington

    How predictable that was! The insiders cashed out after 24 hours! Ha, ha!

  • Ankur Varsheny

    I guess definition of “DIVES” needs an update in my dictionary.
    4% drop after 38% pop is not a dive.

    • Jack

      I guess when it ever jumps 4% next time, it will be called sky rocketed; otherwise, who else will read this.

  • I personally think all the juice is squeezed out of the Alibaba IPO, check out my blog post on it: http://militellocapital.com/one-mans-ipo-is-another-mans-exit-strategy/

 
 
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