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Garnry: Alibaba will be second largest internet firm in the world
The Alibaba IPO is generating a lot of excitement, but why? Saxo Bank’s Head of Equity Strategy Peter Garnry has been analysing the Alibaba filing documents. The firm will become “the most valuable internet company in the world after Google”, that’s according to Peter who says Alibaba will be valued twice the size of Facebook on sales. The Alibaba figures are huge, especially for a company set up as recently as 1999, the firm claims 76.2% of mobile retail in China, 231 Million active buyers and $248 Billion in gross merchandising.
The commercial structure brings in a more than healthy 45% profit margin, largely because Alibaba doesn’t actually sell anything, as the company states in its IPO filing: “we do not engage in direct sales, compete with our merchants or hold inventory.”
Yahoo share holders are already investing in the success of Alibaba. Yahoo owns a 22% stake in Alibaba and stands to boost its own stock when the IPO is launched in the weeks ahead.
So Alibaba, one of the most eagerly awaited IPOs in recent years, offering investors a chance to get a chunk of the bulging Chinese online economy.
02:11 minutes
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