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Big Mutual Funds Eyeing Alibaba (BABA) IPO

Stoyan Bojinov Sep 19, 2014

All eyes are set on Alibaba Group Holdings Ltd. (BABA) this morning as the company gears up to make its debut on the New York Stock Exchange.

Inside the Alibaba IPO

Why should investors care? Aside from the size of its IPO, Alibaba is a juggernaut in the online marketplace space. The company boasted online sales of $248 billion last year, which is more than eBay.com (EBAY) and Amazon.com (AMZN) combined. In 2013, it is stated that the company generated $8.5 billion in revenues.

All in all, the IPO is valued at approximately $167 billion, which would make it among the largest in history.

What BABA Means for Mutual Fund Investors

Fund industry bellwethers including Fidelity, BlackRock, and T. Rowe Price have already asked for some large allocations, and are expected to be among the company’s biggest new shareholders. Smaller firms like Wellington Management Co. and Putnam Investments LLC have also requested shares in the China-based online marketplace behemoth.

Although exact amounts have not been officially disclosed yet, some sources suggest that each of the firms has requested more than $1 billion worth of shares; this showcases the strong interest among institutional investors surrounding this highly-anticipated IPO.

The Bottom Line

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