Banks involved with Alibaba’s Sept. 18 initial public offering exercised the so-called “greenshoe option,” which allows the banks to buy up to 15% more of Alibaba’s shares because demand outpaced expectations and the share price exceed the IPO price.
The additional sales put the value of Alibaba’s IPO at $25 billion, the largest IPO in history.
The Chinese e-commerce giant saw its shares rise in value from the IPO per-share price of $68 to $93.89 by Friday’s close. The price was ticking down slightly Monday morning.
Alibaba’s IPO managed to exceed many analysts’ decidedly high expectations, and the company is now poised to make good on its stated aim of overtaking Wal-Mart Stores Inc. as the world’s largest retailer. What that looks like and how close that comes to being true depends on a range of factors, including China’s economy and Alibaba’s business model, among others.