Investors believe Alibaba will fly
Alibaba.com, the world's most popular business-to-business company, went public today in Hong Kong. Scott Tong explains the IPO's strong points and tells us where the risks are.
The Alibaba.com logo displayed on the side of a taxi in Hong Kong. (Ted Alijibe/AFP/Getty Images)
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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.
