Last Tuesday, Chinese marketplace Alibaba crushed all year records and beat Uber’s IPO of $8.1 billion, by reaching $11.2 billion.
This not only shows a good future for the Chinese marketplace, but it also shows that the reputation of the tech giant was strong enough not to repeal investors – as the IPO was launched from the Hong Kong Stock Exchange, where the city has been undergoing political unrest that partially shut down the local economy.
As a result, Alibaba’s shares jumped more than 6% on the day of the launch, while its rival’s shares, Tencent Holdings, fell 0.9%.
Alibaba is doing a home run
Alibaba is not new to the markets. Back in 2014, the Chinese e-commerce company started trading on the New York Exchange with the ticker BABA after it raised nearly $25 billion for its first initial public offering. While the unit share costs about $68 on its first day, it has now gained 173% of its value as it was worth about $185 this week.
— Yahoo Finance (@YahooFinance) November 30, 2019
Last week, the Chinese company went public as well on the Stock Exchange of Hong Kong. Investors has shown great excitement despite the political background.
Jack Ma, Alibaba’s founder, confirmed that he initially wanted to do the company’s first IPO in Hong Kong but had to switch to the NYSE after a dispute regarding Alibaba’s board members.
A political trust boost
If Jack Ma had issues dealing with the Hong Kong authorities to do his IPO a few years ago, it seems that the government was more flexible this year.
Alibaba IPO does not come at a better time for the city, which has been facing the most violent riots since its independence.
— FAO Global (@FaoGlobal) November 26, 2019
Hong Kong protests started last March; locals are protesting against increased Chinese government intervention over the years.
During the protests ten protesters have died and hundreds have been wounded so far, tourism has fallen by 40% on average compared to 2018. The country has lost $76 million from the aviation industry, as many flights were cancelled.
Alibaba focuses on cloud computing
Last but not least, Alibaba has announced it would invest in new technologies in order to stay competitive. Cloud computing and machine learning are likely to be the two biggest branches the e-commerce giant will focus on early next year.
— Yicai Global 第一财经 (@yicaichina) December 3, 2019
As digital payment has penetrated more than 70% of China, it looks like digital data will be a priority in order to stay ahead. At the moment, Alibaba’s payment method, Alipay, has more than 900 million users.