05 September 2014

SP 500 and NDX Futures Daily Charts - BABA - Here Comes the Big Daddy IPO of All Time

"A fire broke out backstage in a theatre. The clown came out to warn the public; they thought it was a joke and applauded. He repeated it; the acclaim was even greater.

I think that's just how the world will come to an end: to general applause from those who believe it's just a joke.”

Søren Kierkegaard

The hills are alive, with the sounds of music.....
Alibaba announced that it will kick off its IPO in New York City on Monday, September 8.  Represent!

The company is considered an advertising company performing a middleman function more similar to eBay than Amazon in the ecommerce space in China. 

The IPO will value the company at a mind-boggling 162.7 Billion dollars.  That is about 60 to 66 dollars per share.  The stock symbol will be BABA.   Big Daddy!
It is a real company with real revenues and profits.  It's competitive longevity and growth prospects being worth a few hundred billion, or not, is the question.  The company does not have a buying and delivery infrastructure like Amazon or Walmart.

Yahoo will own a 16.3% share of the company after the IPO.  Given their own business performance they might do well to sell the shares and invest the proceeds--  in Treasuries.

Players will be able to buy just a portion of the company, however, about 21 billions worth.  About 20 percent is slated for retail.  Start begging your broker now.

Goldman will have the job of batting cleanup, making sure that the IPO goes well after it begins trading.  This includes stabilizing the price and order flow, by buying and selling shares.  Mr. Fixit is on the job.

Morgan Stanley is leading the 'friends and family' stock allocations.  Deja vu!  Is that the Friends of Frank Quattrone?

New York is getting the IPO rather than Hong Kong because the Yanks are allowing Alibaba to maintain its current management structure whereas Hong Kong leaned towards voting shares, allowing Jack Ma to maintain a more private control.

There is a lot of juice behind this one, people.  Barring any exogenous incident, there are a lot of VSPs (Very Serious People) with a vested interest in a calm market between now and the actual IPO date. There will be more professional, highly skilled beauticians slapping lipstick and makeup on this IPO than there are on the recent troubles in the Ukraine.

And I like it when you Call Me Big Papa.  Throw your hands in the air, if you a true player, try to snag some pre-IPO share.  Here comes what might be a notorious P.I.G.

Have a pleasant weekend.