Reading Alibaba´s IPO makes me think of the changes in the financial markets. This huge 21 billion dollars IPO will be making history in the markets for many ways. It will lead this Chinese e-commerce giant to the history books of NYSE (www.nyse.com) and give for example funds new investment case with 163 billion dollars market value.
Alibaba “BABA” as its ticker will be when the trading starts next week the 19th September, has priced its shares around 68 dollars and they expect the demand to be enough to sell the stocks at the high end of the offering range. The final offers will be placed in the early next week. Alibaba has had its global roadshow in the US last week and next week they will be in London.
The company is a good example of what internet has enabled to Chinese business people and the huge growth potential in the Asian markets. The IPO growth story is good and backed with figures. International media companies have analysed Alibaba many times. One of the topic questions has been, if this Chinese company is to rival Amazon altought the business strategy is different.
The roadshow is also branded by the company founder Jack Ma and his story, as was the story of Facebook in 2012 when the company listed. And lessons learned from that, Alibaba do not want to push the price too high. Facebook´s IPO faced many obstacles in the beginning of the trading: one of them the high pricing. And NYSE is already testing the trading system with brokers.
On the other hand, financial markets focus now more on governance issues. Some institutional investors are not easy for example with the board nomination in Alibaba due to the governance structure of the company. And questions have been raised about the payment subsidiary Alipay, which is not included in the IPO.
Investors with long-term focus have to think about the ESG disclosures and reporting nowadays more than ever. And this will have its effects on the company storytelling and branding. Companies with focus on long-term value creating and reporting will be the winners in the financial markets, whether they are huge giants or growth companies.