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Alibaba priced its shares at $68 apiece Thursday, raising $21.8 billion for the company and investors, and solidifying its stature as the biggest U.S. IPO in history.
The stock is to trade under the symbol BABA Friday on the New York Stock Exchange. While initial investors paid $68 a share, pricing confirmed by Renaissance Capital, strong demand for the stock indicates it could move higher when trading begins and the masses pile in.
"It`s going to bounce up quite a bit," says Francis Gaskins of Equities.com. The company and underwriter is pricing below the level of demand to make sure the shares trade higher, he says. "They want it to be successful."
The pricing comes in at the top of the latest expected price range of between $66 and $68 a share and well ahead of the initial expected range of $60 to $66. By raising $21.8 billion from the deal, the IPO tops Visa`s $17.9 billion offering in 2008, which was previously the U.S.`s No. 1, says Renaissance Capital, which manages an initial public offering exchange-traded fund.
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BIGGEST U.S. IPO IN HISTORY, ALIBABA
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The $68-a-share IPO price values the entire company at $170.8 billion. That valuation would make Alibaba the 23rd most-valuable company in the Standard & Poor, ahead of other tech titans like Amazon at $150 billion and eBay at $65 billion. Since the company is domiciled outside the U.S., though, the company isn`t subject for inclusion in the S&P 500.
But analysts say the price is attractive for a company so large, profitable and entrenched in a fast-growing economy. "It looks like they priced this to sell," says John Fitzgibbon of IPOScoop.com.
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TOP US IPO ALIBABA PRICES AT $68
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