Markets often encounter short-term volatility cycles, which present long-term investors with lucrative buying opportunities. Alibaba (BABA) has long been plagued by irrational macroeconomic concerns, specifically within China. As such, the company's share price has experienced an unjustifiable 38.84% decline since November 2014.
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Yelp Needs Help
The Wall Street rumor mill has been working overtime during the past month. Just a week after shares of Salesforce (CRM) popped double-digits following a report that the company was preparing to sell itself for $55 billion, shares of Yelp (YELP) jumped nearly 30% for the same reason.
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Alibaba Back On Track
Chinese e-commerce conglomerate Alibaba (BABA) first issued its record $25 billion IPO on the NYSE in September 2014. At the time, there was much fanfare from anxious investors eager to buy shares of the company. However, since then, Alibaba's public sentiment has fallen. Since its IPO, Alibaba's share price has mostly fallen, reaching a historic low of $79.54 per share on May 5th.
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Three IPOs, One Clear Winner
So far this year, 43 companies have made their publicly traded debuts. As a whole, IPOs have experienced a solid year thus far, raising nearly $7 billion YTD and averaging returns of 22%. Last week alone, seven companies issued IPOs, including four companies trading at valuations of over $1 billion. Among them were popular online retailer Esty, which specializes in selling handmade goods, and high-frequency trading firm Virtu Financial (VIRT).
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5 Terrible Tech IPOs
2014 proved to be the year of initial public offerings (IPOs). In America alone, 275 companies issued common class stock, the most since 2000 (when over 400 companies engaged in IPOs). Led by Chinese E-Commerce giant Alibaba (BABA), U.S. IPOs in 2014 raised over $85 billion in capital, an increase of more than 40% Y/Y compared to 2013. Alibaba alone raised a record-breaking $22 billion, besting both Facebook’s (FB) 2012 IPO ($16 billion) and Visa’s (V) 2008 IPO ($17.8 billion).
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Has Amazon Lost Its Swagger?
Amazon (AMZN) was once considered the top online retailer; however, since Alibaba's (BABA) recording breaking IPO, Amazon has been overshadowed by the Chinese e-commerce giant. With naturally higher profit margins, revenue growth, and earnings growth, it’s not hard to see why Alibaba is suddenly a Wall Street darling, and why Amazon has been neglected.
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When Billionaires Clash
Ever since Alibaba (BABA) had its record-shattering U.S. IPO, it appears the Chinese e-commerce giant and its American competitor, Amazon (AMZN), are destined for a Wall Street showdown. In an unpredictable market, with many potential outcomes, I will focus on two questions: 1) can Amazon convert its R&D investments into positive quarterly reports and 2) will Alibaba continue to build upon its momentum and run Amazon out of American markets?
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