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Alibaba IPO: the Chinese whispers get louder
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Despite all the Chinese whispers about the upcoming Alibaba IPO, we won’t know the exact price per share until the eve of the launch due on August the 8th, a lucky number in China, however we do have recent figures from the usually secretive company which shed some light on what the IPO price might be. Saxo Bank's Head of Equity Strategy, Peter Garnry, has been analysing the most up to date earnings.
The most recent financial results for Alibaba show a massive USD 7.3 Billion in revenue a year on year growth of fifty five percent, the sort of turbo charged numbers which have investors drooling. Alibaba’s EBITDA margin is sixty eight percent versus fifty one percent at Facebook, a key indication of just how rich the company. The number of active users on Alibaba’s ecommerce platforms has risen to two hundred and fifty five million from one hundred and seventy two million a year ago, that’s an important positive development which can only strengthen demand for the shares when they go on sale. The firm faces strong competition from rival Tencent, the tech company which dominates the instant messaging market in China. Tencent shares have risen around twenty percent this year. With Yahoo owning twenty four percent of Alibaba, Yahoo stock holders stand to benefit from Alibaba's launch.