Tuesday, 22 October 2013

Alibaba IPO

So this post will affect my share trading and Amazon business interests rolled into one. Alibaba's rumoured IPO. For those of you who don't know, Alibaba is a website based in China where you can order goods directly from the manufacturers. I use it sometimes when buying stock for my business. Anyway, Alibaba is supposed to triple its volume of sales and overtake Walmart as world no.1 by 2016. It's predicted that the IPO will sell shares worth $10-15 billion, valuing the whole company at about $100 billion!!!! That's a huge valuation, but it's backed up by last years growing profits of over $1 billion. Apparently, sometime after Twitter's IPO, billionaire Jack Ma, will announce that Alibaba will float on the NYSE. It's eventual performance though, will depend massively on the developed world's demand for Chinese made goods, which may be slipping. The Chinese government have increased wages significantly more than inflation gradually over the past decade, and it's predicted that by 2015 it will be actually more expensive for US manufacturers to outsource to China, when you factor in shipping etc. These wage rises could be a massive blow for Alibaba, who rely on it being cheaper for firms to buy in from abroad than to build at home. Anyway, the whole thing isn't even official yet, so maybe I'm getting ahead of myself.

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