The world’s biggest IPO makes Jack Ma the richest mainland Chinese at $25b

Alibaba shares surge on New York stock market debut

Wall Street debut for e-commerce giant makes founder Jack Ma richest man on mainland as firm sells extra shares to meet strong demand
Ray Chan in New York and Agencies

Chinese e-commerce giant Alibaba’s shares surged on its long-awaited Wall Street debut yesterday following a record stock offering that opens the door to its global expansion.

Shares opened at US$92.70, 36 per cent above their US$68 offer price. Demand was so strong that Alibaba sold an additional 48 million shares, making the offer the world’s biggest IPO.

A group of Alibaba customers rang the opening bell at the New York Stock Exchange, including Lao Lishi, an Olympic swimming gold medallist in 2004 who has a store on Alibaba’s Taobao platform selling wooden prayer beads and bracelets.

The listing has made founder and chairman Jack Ma Yun, 50, the mainland’s richest man. He sold shares worth US$867 million in the offering, with the bulk of his wealth tied up in the 206 million shares he is hanging on to – representing about 7.3 per cent of the company’s enlarged share capital. Ma now has an estimated net wealth of more than US$25 billion.

“Personally, I don’t have any feeling of being the richest person in any way,” Ma told reporters at the New York Stock Exchange after the shares debuted.

He added that he felt “blessed” by the trust of investors and the company would “spend the IPO money wisely and carefully”.

Alibaba and its investors, including Yahoo, raised US$21.77 billion by selling 320.1 million American depository shares, with half allocated to 25 large institutional accounts, according to people familiar with the deal.

The share sale was already a US record; with the extra shares it would eclipse the US$22 billion world record set by Agricultural Bank of China in its 2010 dual listing in Hong Kong and Shanghai.

Yahoo shares gained 1.7 per cent in early Nasdaq trading after Alibaba priced its initial public offering at US$68 a share, the top end of the expected range.

Alibaba’s largest shareholder, Japanese telecommunications giant SoftBank, owns 32.4 per cent of the company after the IPO.

SoftBank, which did not sell any shares in the IPO, saw its shares rise 0.6 per cent in Tokyo trading yesterday

The second-biggest individual IPO windfall went to Alibaba vice-chairman Joseph Tsai. He has 83.5 million shares worth US$5.7 billion at the IPO price and cashed in US$300 million worth of shares.

Ten other Alibaba directors and executives hold a combined 52.3 million shares, or about 2 per cent of the company.

In a commentary last night, Xinhua said 15-year-old Alibaba’s emergence as an e-commerce giant reflected the “rising power of Chinese business on the world stage”.

Rising internet and smartphone use had “opened new battlefields for Chinese entrepreneurs”, it said. “With better local knowledge and public trust, some ambitious young Chinese companies have managed to outshine their American counterparts expanding into China,” Xinhua said, listing success stories such as Alibaba, Baidu, Tencent, JD and Sina.

It said about a third of the 20 internet companies with the highest market value were now based in China, with many of them choosing to go public in the United States.

Agence France-Presse, Bloomberg, Reuters