Wednesday, 7 May 2014

Alibaba: New kid on the financial block

Sunduzwayo Madise
7 May 2014
Chinese technology giant Alibaba is today set to offer its shares on the New York Stock Exchange in the world's biggest initial public offering (IPO) so far. Alibaba will make available to investors 12% of its shares and is expected to raise $20 Billion eclipsing the record set up by Facebook's IPO ($18B). For those who have dealt with or are aware of eBay and Amazon, Alibaba conducts e-commerce more than eBay and Amazon combined and is also into other technology fields. It has 80% market share of China's 300 million e-commerce users. It is the second largest technology company after Google, worth some $168B. There has been debate in the financial world as to whether Alibaba is worth this much. There has been debate whether any if the technology companies (such as Google, Facebook, Twitter) are worth the money tagged to their shares. For Alibaba at least, the results if the IPO will start answering that. Whatever the case, Alibaba seems to have come with a bang!

But is a share really worth anything or nothing or "whathing"? It's all in the mind of the investor! And it perpetuates the illusion that one owns a piece of a company!

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