Alibaba
Group Holding Ltd. surpassed Facebook Inc. (FB) by market capitalization on its
first day as a public company right from the minute it started trading and
closed with a valuation of more than $231 billion.
Alibaba
surged 38 percent above its initial offering price to close at $93.89 in New
York yesterday. The Chinese e-commerce company, which began the day with a
value of $228.5 billion, now trails only Google Inc. (GOOG), Apple Inc. (AAPL)
and Microsoft Corp. (MSFT) in size among U.S.-traded technology companies.
Facebook passed $200 billion in market value earlier this month and is worth
$201.6 billion as of yesterday’s close.
Alibaba’s
public-market debut contrasts with Facebook’s May 2012 sale. Facebook, which
was valued at $104 billion at its IPO, lost half that in the following months,
and the stock took more than a year to close above its IPO price. While Alibaba
has risks related to corporate governance and the Chinese government’s
unpredictability, that hasn’t stopped investors, said Jeff Sica, chief
investment officer at Sica Wealth Management.
“There is
much more of an ignorance-is-bliss attitude, there’s much more of a feeding
frenzy where investors are afraid to miss out on the next big thing,” said
Sica, whose fund manages more than $1 billion. “There’s been hunger built up in
the market for Alibaba and they’re ignoring the fact that there are a lot of
negative variables.”
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