Tuesday, November 6, 2007
Shares in Alibaba.com nearly tripled in their first day of trading in Hong Kong on Tuesday, as the frantic boom in China-related stocks showed no sign of letting up.
Shrugging off warnings of a stock market bubble, investors drove the business website's shares up from the initial offering price of 13.50 Hong Kong dollars (1.74 US) to 39.50 at the close -- a surge of 193 per cent.
The strong debut followed another sizzling opening from PetroChina, which became the first company in the world valued at one trillion US dollars in its first day of trading in Shanghai.
Alibaba.com, a business-to-business website started seven years ago, began trading just days after it raised 1.5 billion US dollars in its IPO -- the second-largest Internet offering ever after Google in 2004.
The IPO was over-subscribed 150-fold, underlining the massive demand for China-related shares, particularly new issues, despite some analyst fears that a correction is on the cards in future.
The company has built its success by providing small- and medium-size Chinese manufacturers of everything from garden furniture to sex toys a way to sell their products both within China and across the world.
The website, which has both Chinese and English versions, offers free listings for suppliers and buyers. Revenue comes from a percentage of members who pay for additional services such as search listings or factory inspections.
Revenue has grown from 359.4 million yuan (48.2 million US dollars) in 2004 to 1,363.9 million in 2006, riding on the back of the mainland economy's double-digit growth over the past few years.
Former schoolteacher Jack Ma founded the firm seven years ago in the Chinese city of Hangzhou with less than 20 staff. It now has 4,400 employees.
By: DocMemory
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