Alibaba Sets IPO Price at $68 Per Share Becoming Biggest U.S. IPO Ever

By Katie Roof Features FOXBusiness

Alibaba IPO priced at $68 per share

Harrington Capital Management founder Kyle Harrington, CapitalistPig founder Jonathan Hoenig and FBN's Jo Ling Kent on the Alibaba IPO.

Chinese e-commerce giant Alibaba has priced its offering at $68 per share, at the top of its proposed range. Alibaba has surpassed Visa to become the biggest U.S. IPO ever raising $21.8 billion.

Continue Reading Below

The company is set to list on the New York Stock Exchange on Friday, under the ticker “BABA.” The company will command a market value of $168 billion, pushing above U.S. rivals like Amazon (AMZN) and eBay (EBAY).

While $68 a share is the price at which insiders and select institutional investors were able to purchase shares, it's unclear at what price it will open in trading. Demand for Twitter’s (TWTR) 2013 IPO caused shares to open at $45 a share, significantly higher than its initial price of $26 a share.

After several lackluster years for U.S.-listed Chinese IPOs, the eleven companies that have gone through this year have performed well. The average U.S. return on this year’s Chinese IPOs is 37%, higher than any other nation, according to Dealogic.

“Not a single one went down, they are all trading up off their IPO price,” Kathleen Smith, principal at IPO ETF manager Renaissance Capital, says. She adds that it’s the “best performing segment of the IPO market.”

This is a sign that investor confidence has returned in Chinese IPOs, which for several years were tarnished by accounting scandals. Smith says this is because the “SEC has come down hard on" accounting firms and their Chinese subsidiaries. There’s also a “certain amount of complacency because investors have been making money.”

Continue Reading Below

Alibaba’s lead underwriters include Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan and Morgan Stanley. Citigroup and Rothschild are also involved.

What do you think?

Click the button below to comment on this article.