Social Media And The Stock Market: What Internet Users Expect From Alibaba

When Chinese e-commerce giant Alibaba went public on the New York Stock Exchange (NYSE) on September 19^th, many people outside China were not even sure what its business entailed, much less what to expect from its stock performance. The platform mainly focuses on business-to-business sales, but also offers vendors an opportunity to sell their merchandise directly to customers. It also covers online payment services, taking care of almost all aspects of online sales.

Buzz increase towards IPO date

As can be expected, the buzz for Alibaba increased with the Initial Public Offering (IPO) drawing closer. After the conversation died down a little during early September, it increased drastically again towards the middle of the month. A peak was reached on September 16^th with around 40,000 posts on the topic.

Valuation and stock price at the center of attention

A large part of the discussion around Alibaba focused on the IPO, the valuations and the stock prices prior to flotation. The valuation alone made for around 70% of the conversation. The initial pricing per Alibaba share was at $68. When trading began with a slight delay on Friday morning, the value had skyrocketed to $92.70. The current value of the company now is now estimated to be around $230 billion.

Corporate structure tops list of concerns

Concern was raised with regards to Alibaba’s corporate structure. The company has 27 partners, who will offer the majority of nominations for the board of the e-commerce giant. The shareholders will then vote on these nominations. However, with a few major shareholders – among them Alibaba founder and Executive Chairman Jack Ma, his Executive Vice Chairman Joseph Tsai or the Yahoo Inc. with 24% of Alibaba shares – voting on the board nominees, smaller investors will have little influence on the decision. Further concerns were voiced about possible interferences from the Chinese government, the company’s reputation and possible issues with counterfeit products.

Expectation for the stock

A large majority of users expect the Alibaba stock to over- rather than under-perform. Almost 70% expect over-performance, at least in the short term. In contrast, less than a third anticipate under-performance. It remains to be seen whether Alibaba can fulfill the expectations of its shareholders. The share has already seen a slight drop in its first few days being traded, but still hoovers around the $90 mark. And while the buzz around Alibaba has decreased since the IPO, hopes are high for shareholders and the company alike.

Social Media And The Stock Market: What Internet Users Expect From Alibaba