Chinese e-commerce giant Alibaba’s plans to sell shares to the public could turn into the largest IPO in U.S. history. “This is going to be the granddaddy of all IPOs,” predicted Sam Hamedah, CEO of PrivCo, which researches major privately held corporations.
Although it’s not well-known in the United States, Alibaba is an e-commerce powerhouse that makes more money than Amazon and eBay combined. The company is responsible for more than 70 percent of online shopping in the world’s second-largest economy. Alibaba has helped drive the rise of e-commerce in China, a transformation that has given millions of households greater access to clothes, books and consumer electronics in a society that in the 1980s still required ration tickets for some supermarket items.
Shopping online has become even more popular as smartphones give more Chinese easy access to a computer. Alibaba’s launch of an online payment system, Alipay, filled the gap for the shoppers who lacked credit cards. Internet shopping in China is still growing at an explosive rate.
Alibaba will make its market debut later this year. While the online giant could raise as much as $20 billion – even more than Facebook’s IPO – the offering announcement came as valuations of high-flying U.S. tech stocks have fallen to earth.
Twitter stock plunged 18 percent Tuesday as the lockup period for insider investors expired and some sold their shares. Netflix fell 5 percent, Facebook and Amazon 4 percent each, and Google, 2 percent.
Former Fed Chairman Ben Bernanke has a book deal worth at least $1 million. His agreement is with publisher WW Norton, according to The Associated Press. The book will deal with his years at the Federal Reserve and Bernanke’s response to the 2008 financial crisis.
The Institute for Supply Management says businesses of all kinds expect increases in revenue, capital expenditures, employment and production capacity this year. ISM’s latest economic forecast finds optimism in both the manufacturing and service sectors, with manufacturing industries revenue to rise more 5.3 percent and employment by 1.5 percent. Service sector businesses are expecting less revenue growth but about the same employment growth.
Whole Foods has cut its profit outlook for a third time. It’s a sign of growing competition the grocery chain is facing. Co-founder and co-CEO John Mackey says Whole Foods had the organic and natural foods market to itself for a long time, but he’s telling investors “the reality is that we don’t anymore.”
Mackey says he still sees room for growth. Whole Foods has been trying to keep its prices down, in part by pushing its more affordable store brands to appeal to more customers. Whole Food continues to turn a profit and revenues are rising, but its latest financial results fell short of expectations.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesnow