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Investors believe Alibaba will fly

Scott Tong Nov 6, 2007
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Investors believe Alibaba will fly

Scott Tong Nov 6, 2007
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Scott Jagow: Ho hum, another day, another massive Chinese IPO.
Yesterday, it was PetroChina in Shanghai. Today, the e-commerce firm Alibaba went public in Hong Kong. Marketplace’s Scott Tong reports.


Scott Tong: Think of Alibaba as the online dating service for global business. The world’s most popular B2B — or business-to-business — website connects Chinese manufacturers with buyers around the world.

Alibaba investors predict a magic carpet ride into China’s digital future. And consider these numbers: China has 160 million Internet users — average age, a youthful 32 — and the online advertising market grows 45 percent every year.

Now the “however:” Remember what dot-com and IPO brought America in the 90’s? Alibaba’s price-to-earnings ratio — based on today’s closing price — is a whopping 320.

Another risk is that foreign buyers will continue to sour on Chinese exports for perceived quality or safety reasons. And Alibaba is at the heart of the “Made in China” supply chain.

In Shanghai, I’m Scott Tong for Marketplace.

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