Chinese business-to-business sales web site Alibaba.com raised a staggering US$1.5 billion on its November 6 2007 initial public offering (IPO) in a transaction said to be one of the largest IPOs ever by an internet company worldwide, second only to Google¡¦s 2004 US$1.66 billion debut. The IPO saw the company sell 858.9 million shares.

Alibaba.com shares nearly tripled from an issue price of HK$13.50 (US$1.74) to more than HK$40 (US$5.13), but had lost more than 30% of their peak value just one week after the stock¡¦s debut on the Hong Kong stock exchange, closing just above HK$27 (US$3.46) on November 13 2007.

The company¡¦s English-language website specializes in business-to-business (B2B) trades, aimed especially at international buyers and Chinese sellers, while its Chinese-language website targets B2B activity within China. It also operates a consumer-to-consumer website similar to eBay and an online payment site similar to PayPal.

Howard Gorges, vice chairman of South China Brokerage in Hong Kong, told the Voice of America that Alibaba.com may be overvalued and likely will see further declines on profit-taking. ¡§The company appears to be a good company, probably will grow its profits fast,¡¨ he said. ¡§But can it grow its profits fast enough, long enough to justify the current share price? That¡¦s anybody¡¦s guess, but we saw the bubble in America in 2000, so one¡¦s just got to bear that in mind.¡¨

Freshfields Bruckhaus Deringer, Sullivan & Cromwell, Fangda Partners and Maples and Calder advised Alibaba.com. Goldman Sachs, Morgan Stanley and Deutsche Bank were the joint lead managers. N M Rothschild & Sons (Hong Kong) acted as financial advisor.