China's e-commerce giant Alibaba ranks as the biggest IPO ever in its debut on the NYSE. Jeanne Yurman reports.
As if somebody said the magic word, the doors opened wide for Chinese e-commerce giant Alibaba Friday as it made its public debut at the New York Stock Exchange. Shares priced at the high end of the expected range at $68 a share and shot up more than 30 percent in the first 10 minutes of trading. It marks the biggest IPO in history. Demand for a slice of the 15 year-old company started by a former English teacher, Jack Ma, has been fierce and for good reason says Rett Wallace of Triton Research. SOUNDBITE: RETT WALLACE, CEO, TRITION RESEARCH (ENGLISH) SAYING: "When you can buy something that's new and exciting and is already up and running and already well established and working very well, it's unique and something for people to get excited about." Unlike other Internet companies, which investors buy believing they can grow, Alibaba already dominates in the world's second largest economy. It accounts for eight of every 10 online transactions. Users can buy everything from socks to railroad tracks. It offers services ranging from banking to online payments. As big as it is, it still has tons of room to grow. Access to high-speed mobile connections is still relatively new, as is China's recent shift to being a consumption-based economy. And Alibaba has plans to expand to both the U.S. and Europe. Morris Mark of Mark Asset Management is an Alibaba fan. But he does have reservations. SOUNDBITE: MORRIS MARK, MANAGING PARTNER & CIO, MARK ASSET MANAGEMENT (ENGLISH) SAYING: "You got to remember you are dealing with a company that operates in China. It's one of the things we're going to be watching in general is the relationship with China and the U.S. just in general." And it lacks the transparency that a lot of investors would like. Rett say Alibaba is like a sleek auto racing down the track. SOUNDBITE: RETT WALLACE, CEO, TRITION RESEARCH (ENGLISH) SAYING: "Next year or the year after, I think then investors are going to want to climb into the engine and see how this thing works. But for today, boy, are they going to be loving this car." Despite the flash and drama of mega IPOs like Alibaba, their median return is only four percent in the first year. Alibaba supporters are confident it will beat that stat. For now, investors are enjoying what feels like a magical first day of trading with shares closing 37 percent higher at just over $93 a share.