Alibaba Group Holding Ltd (NYSE:BABA) has seen notable interest from billionaire hedge fund managers like David Tepper, Leon Cooperman, and Dan Loeb. When it comes to tech investing, there aren’t a lot of hedge funds that are better than Tiger Global. According to an investor email seen by Insider Monkey Tiger Global didn’t wait for an IPO to invest in Alibaba Group Holding Ltd (NYSE:BABA). Between September and December 2013, one of Tiger Global’s private investment vehicles invested a total of $237.7 million in Alibaba Group. Tiger Global “did not sell any shares in the IPO and continues to own approximately 0.23% of the company. Based on today’s closing price, PIP VII’s stake in Alibaba Group is valued at $548.5 million, a 2.3x multiple on invested capital and a 149% gross IRR,” the email said.
Tiger Global, founded by Chase Coleman, has been doing this for a while now. They were early investors in Facebook Inc (NASDAQ:FB) and Linkedin (NYSE:LNKD). Tiger Global made more than $1 billion from its Facebook investment by being early. Here are other excerpts from Tiger Global’s email about their Alibaba Group Holding Ltd (NYSE:BABA) investment:
“Alibaba Group, a PIP VII portfolio company, completed an Initial Public Offering today on the New York Stock Exchange under the symbol BABA. The offering price was $68.00 per ADS share. The company and its shareholders raised approximately $23.3 billion in proceeds, assuming exercise of the greenshoe and net of underwriting commissions, making it the largest IPO in US history. Alibaba Group has a market capitalization of roughly $234 billion based on today’s closing price of $93.89, a 131% premium to PIP VII’s cost basis.
Alibaba Group Holding Ltd (NYSE:BABA) is the largest e-commerce company in China and globally, with $296 billion of gross merchandise value (GMV) sold across its sites in the twelve months ended June 30, 2014. The company’s two largest platforms include Taobao Marketplace, China’s largest online shopping destination for buyers to connect with sellers, and Tmall, China’s largest third party platform for brands and retailers. Alibaba Group generates revenue primarily from online marketing services sold to merchants, commissions on transactions, and fees for online services. For the fiscal year ended March 31, 2014, the company generated $8.5 billion of revenue and $3.8 billion of net profit. Given China’s fragmented offline retail footprint, we remain excited about the company’s long-term growth prospects as it continues to gain share of consumer spending.”
Alibaba Group Holding Ltd (NYSE:BABA) shares currently trade at $88. Tiger Global’s stake is worth a little over $500 million at current prices.