Ali IPO US Retail Investors

Alibaba group has submitted the updated IPO prospectus to the US Securities and Exchange Commission (SEC) on Friday, and plans to raise up to $24 billion 300 million. Although the price range announced by Alibaba group is lower than expected in the paper, this transaction is often described as the hottest IPO transaction since Facebook came public in 2012.

In general, retail investors can only buy 10% to 20% of the stock in large IPO transactions. A number of financial advisers have said before that Alibaba group's IPO transaction will be looted by retail investors. But the fact is that retail investors who call for consultation are not that many.

"Americans are very familiar with Facebook, but no one in Alibaba group has heard of it." Bob Mika Bob Mecca, Hoffman Estate, Illinois, says he manages $175 million of trustee management assets.

Steve Quilk Quirk, a senior vice president of active trader services group at TD Ameritrade Holding, a discount broker, said that at this stage, the number of clients seeking IPO transactions with Alibaba group was only about 1/4 of the number of Facebook transactions questioned two years ago, compared with Twitter's IPO transactions, which is only about half of that of the Twitter group. Alibaba group spokeswoman Robert Christie (Robert Christie) declined to comment on the fact that the group is currently in the silent period on the eve of IPO.

The industry pointed out that the Alibaba group's decision to set its IPO pricing range at US $60 to $66 per American Depositary Receipts indicates that the group may not be very interested in whether or not it can have a large US retail investor group. The reason is that retail investors prefer stocks with lower price per share. If Alibaba group wants to attract retail investors, it could have set the IPO price range at a lower level and offered more shares to raise the same amount of money.

The result of inadequate response from retail investors is that Alibaba group's performance on the first day of listing may be relatively quiet, rather than the "explosive" impact that many people expected. Independent IPO expert Tom Dhauli (Tom Taulli) pointed out: "as Alibaba group IPO transaction scale is very large, many investors will be interested in this transaction. But I don't think Alibaba group will have much momentum when it comes to listing.

In the long run, the low interest of US retail investors may have adverse effects on Alibaba group. Generally speaking, retail investors tend to hold shares for a longer time, thereby providing stability for the stock price of their shares. Moreover, the participation of retail investors can diversify the shareholder base of a company. IPO experts say that if the company's shares are too concentrated in the hands of a small number of institutional investors, it may make the company vulnerable to aggressive investors.

"I think for Alibaba group, it is a much better choice to build a strong retail investor base." Joseph Schuster, founder of IPOX Schuster, Chicago investment company, said (Josef Schuster).

However, in the Alibaba group's roadshow, retail investors' interest in this stock is still likely to increase, because investors who want to buy "cheap" retail investors will notice that the IPO price range of Alibaba group is lower than that of the market.

Alibaba group launched a roadshow in New York on Monday, and its roadshow program is expected to reach the global market to London and Hongkong, China. The roadshow will bring more evidence to show how strong the institutional investors are in this IPO transaction and provide a sign that Alibaba group's final IPO pricing is likely to be within the pricing range. Industry analysts originally predicted that Alibaba group's IPO pricing would make its valuation more than $200 billion, but it would only be about $163 billion according to the upper limit of the price range.

　　 Alibaba The group has some large listed shareholders, which means that the group's fans can participate in its stock investment early in other ways. A financial adviser at UBS said that some retail investors who were expected to be excluded from the IPO deal had made another choice to buy shares of Softbank Corp in Japan, which currently holds 34.1% of Alibaba group shares and is the largest shareholder of the group.

　　 Virginia state James Gambaccini, an independent financial adviser, said that for the same reason, some customers have already chosen to invest in YAHOO, the Internet giant currently holding 22.4% of Alibaba group shares. Due to the dilution effect brought by the IPO exchange, the shares of Alibaba group of Softbank and YAHOO will shrink. Meanwhile, YAHOO will also sell part of Alibaba group shares in the transaction. But after the end of the transaction, the two companies will remain the main shareholders of Alibaba group.

But Gamba Sidney emphasized that retail investors are not very interested in the Alibaba group's IPO transaction, partly because many people have not heard of the company; and among those who have heard of it, some are cautious about investing in Chinese companies because they are worried about interference from government intervention and other factors.

In the past few months, California Prefecture Alan Haft, a financial advisor, has been trying to attract retail investors to invest in Alibaba group, but it turned out to be an arduous "battle" for Alan Heift. He said: "in my view, things have become very obvious, that is, most know little about this company, only know that the scale of IPO transactions is extremely large, and know that this company has great influence."