Alibaba.com has already become the second-largest Internet company in Asia as measured by market value, a day after its IPO on the Hong Kong Exchange. The only Asian Internet company with more value is Yahoo! Japan.
The market values Alibaba at about $23.3 billion, an estimated 140 times the projected earnings the company expects next year. The shares have rocketed from their opening price of HK$13.50 to reach HK$35.75.
As a result, this is now the largest IPO since Google (GOOG) went public in 2004, raising an initial $1.66 billion.
The business Alibaba is in is providing an Internet platform for smaller and medium-sized Chinese manufacturers to sell their products around the world. The website offers free listings to buyers and sellers in both English and Chinese.
They generate revenue from additional, prime services they offer like listings for search, among a number of other things.
So far this year, they've reported earnings of 295.2 million yuan, equivalent to about $40 million. At an approximate 140 times earnings, I would say this is overpriced. That would be like saying Facebook is worth $15 billion. Oh, wait, somebody did say that didn't they?
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