Alibaba Group Holding Ltd.'s initial public offering in the U.S. became the biggest ever at $25 billion, after underwriters exercised a so-called greenshoe option to sell an additional 48 million American depositary shares, according to Bloomberg.
On Friday, the shares rose 38 percent to $93.89 apiece in New York, valuing Alibaba at $231.4 billion, making it larger than U.S. rivals Amazon.com Inc. and EBay Inc. combined, as well as Facebook Inc., JPMorgan Chase & Co. and all but 10 companies in the Standard & Poor’s 500 Index.
The surge makes Alibaba one of the most valuable companies traded in the U.S. It also boosted Jack Ma's, founder of Alibaba, net worth to $26.5 billion.
Alibaba broke Visa, Inc.'s 2008 IPO by marketing the offering at a discount to its Chinese peers, attracting interest from money managers including Fidelity Investments, BlackRock Inc. and T. Rowe Price Group Inc. who each asked for at least $1 billion of shares, people familiar with the matter said last week.
It also helped that nearly half the shares were placed with just 25 funds, people with knowledge of the matter said.
“Right now people believe it has an incredible future, and the stock is priced accordingly, but actual results are going to start to matter,” Peter Tuz, who helps manage more than $450 million as president of Chase Investment Counsel Corp. in Charlottesville, Virginia, told Bloomberg.
At recent meetings with investors, Ma focused on the company’s ambitions outside of both the e-commerce field and its home base, describing it as an “Internet company that happens to be from China," according to Bloomberg.