Tag Archive: Google

Alibaba IPO Hits the Market

The most anticipated IPO (Initial Public Offering) in years hit the market yesterday. Alibaba (BABA), the company that seemingly exploded out of nothingness, went public on September 19, 2014. A date that many investors will remember for a long time.

Alibaba had so much buzz built up over the past few months, the valuation of the company was higher than it would have been otherwise. Alibaba was set to open yesterday at $68 per share, in trying to raise about $22 billion. This price values the company at nearly $170 billion. To give you a perspective, Google (GOOGL) is worth about $400 billion. Alibaba came out of no where and worth nearly 43% of what the internet giant, Google is worth. Now that’s what I call an explosion.

The shares of Alibaba rose very quickly. Speculation on what the opening price would be started going from the mid $70s to mid $90s. And because of complications, the share didn’t actually become available for public trading until after 11:30 am, about 2 hours after the stock market begins to trade. And before the stock even went on the public market for public trading, it was worth about $99 per share. That’s a $31 increase of the $68 IPO. If you didn’t have deep pockets, if you weren’t family or worked for Alibaba, you were out of luck. There is no way you could have gotten Alibaba for $68, which is seemed as dirt cheap at the moment. And I know the founder and creator of Alibaba, Jack Ma, is very very happy.

The price of Alibaba shares quickly started to drop. Before you knew it, the stock dropped to just below $90 a share. That’s extremely volatile for any stock. Alibaba shares finished with  a price of $93.89, more than 38% over the $68 IPO price. I know the company and its investors are very happy, including Yahoo (YHOO) who had a very big stake in Alibaba for a long time. A very good investment on their part.

You should expect Alibaba to be very volatile over the next few weeks as investors sell and buy shares based on the hype they collected over the past few months. There is no doubt that Alibaba shares will hit $100 and it may happen sooner than later.

What you need to know about Alibaba shares is that you’re not actually purchasing shares of the company itself. Instead you are purchasing Alibaba Group Holding Ltd. This is a company set up in the Cayman Islands because Chinese law forbids foreigners to own any part of a company based in China. So to get around that, they found this loophole. This is something you need to keep in mind if you decide to invest in Alibaba.

Originally, I planned on investing in Alibaba. And I actually set aside some money to buy the shares, but the price went up so quickly, I didn’t want to risk losing money so I’m holding off for now until the volatility goes down and the price stabilizes. It’ll make predicting the price easier which makes for smarter investing.

Have you invested in Alibaba? Do you plan on investing?

With the recent technological advancements, cell phones have evolved from being functional devices for voice calls to being exceptional portable computers. With the introduction of smart phones to the market, a person can send SMS, surf the internet, play video and music, and do video conferencing. With the changes brought about by technological innovation, people now spend more money on cell phone services. If you’ve been using the mobile phone for the last 10 years, it would be easy to notice the change in your budget for mobile phone services.

The Growing Mobile Phone Bills

During the early 2000, an average American typically spent $210 annually on mobile phone services. Today, the average American spends about $760 annually. According to statistics released by Bureau of Labor Statistics, mobile phone services increased by at least 15% annually for the first 10 years of the new century. Such increase is considered significant considering that during the same period the average increase in annual household expenditures was pegged at 2%.

The Effect Of Cell Phone Bills On Family Budgets

It has been noticed that mobile phone purchases have become a significant part of each household budget. A lot of people have scrimped on clothing and dining out expenses to buy new cellular phones. With such change in buying behavior, expenses related to cellular phone use have increased steadily in the family budget.

The Effect Of Cell Phone Spending On Land lines

With the increase in cellular spending, there is also a significant decrease in land line spending. Because the cell phone has met an individual’s communication needs, the land line has become insignificant. At the start of the new century, the land line bill would have taken around 75% of the total budget for telecommunication. After 10 years, an average individual was spending 65% telecommunication budget on cell phone bills.

How Africa Is Coping With The Mobile Phone Innovations

This shift in telecommunication spending is not only unique in the USA. In fact, Africa is using the mobile phone technology more than the other countries. According to Toby Shapshak of CNN.com, Africans have become creative with their use of cell phones. It is the only continent around the world with a “mobile only” policy. Because most African locations don’t have reliable sources of electricity, Africans have found old cellular phones which had been junked by most countries to be beneficial primarily because this type of mobile phones have longer battery life. It is very common to see Africans using their cell phones to listen to the FM radio.

Africans also have at least 2 SIM cards because mobile networks in the continent charge higher for interconnection fees with different networks. Thus, they just interchange their SIM cards if they want to communicate with other people who are using a different mobile network than theirs. The cell phone is also used to access the internet. According to Shapshak, South Africa records 25% of its Google searches using a mobile phone during the week. On weekends, this figure rises to about 65%. The mobile phone is also being used for money transactions. According to Gartner, mobile money transactions can reach up to $171 billion before the year ends.