Alibaba Group Holding Ltd (NYSE:BABA)’s rough-and-ready as its Initial Public Offering (IPO) is about to take place. CNBC’s Jim Cramer is fully confident that the event will be a success as the company is one of the best that currently exists on the market. Prices for the stock could reach mid-80s, almost $20 above the starting value of $68.
Alibaba Group Holding Ltd (NYSE:BABA) has no reason for anxiety in any form, its financial data looks very appealing to all the investors, there’re many that have planned to get a piece of the pie even in the aftermarkets. It seems very safe, but there’s a little fright the price will skyrocket then hit the ground at some point.
“I’m blessing pay as high as $80 a share for Alibaba, and a few bucks more. With that price it’s among the cheapest and the best of the internet place maybe of whole technology and, guess what, if you don’t like it, you don’t have to buy it,” said Jim Cramer.
Alibaba Group Holding Ltd (NYSE:BABA)’s IPO could get the company as much as $25 billion, the largest amount collected ever at a public offering. It’s no wonder when you consider the fact that the company transforms 46% of its revenues into net income, that is, $3.77 billion out of $8.46 billion come into the company’s bank account after all the pay checks have been filled. It might seem that Alibaba Group Holding Ltd (NYSE:BABA) is still making little money out of its $296 billion transactions’ value, but this strategy proves to bring more profit than the core e-commerce business.
The Chinese giant gets most of its revenues from advertising fees and small transaction charges posed on merchants making its service more economical than the ones provided by competitors. Also, Alibaba Group Holding Ltd (NYSE:BABA) has strengthen relationship with Alipay and if it manages to corroborate with Youku Tudou Inc (ADR) (NYSE:YOKU) and Weibo Corp (ADR) (NASDAQ:WB) to reach customers easier, we will see the valuation grow much more over current amounts.
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