Within the next couple months, China's leading Internet company
will go public. Most red-hot IPOs are off limits to average
investors. But with the
, there is a simple way to buy shares before the company goes
Outside of China, Alibaba isn't very well known. But the
company is the driving force in
China's Internet and e-commerce sector
. Think of the company as an Asian hybrid of Amazon and eBay.
That dominant position has many investors excited about the
upcoming IPO on the New York Stock Exchange (NYSE). It's
currently estimated that Alibaba will raise as much as $15
billion at a valuation of $150 - $200 billion.
That would make this one of the biggest IPOs ever. In
IPO valued the company at $104 billion. And already
Alibaba is twice as profitable as Facebook. With
soaring, investors are lining up to buy Alibaba shares. After
all, there have been several very profitable tech IPOs in the
past few years.
), LinkedIn (Nasdaq: LNKD),
Yelp (Nasdaq: YELP)
, are all terrific examples of IPOs that delivered big profit to
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||March 2nd, 2012
Alibaba is extremely strong financially
. It forecasts at 11 billion dollars in 2014 sales, with a
growth rate of 50%. This means that Alibaba sales are
similar to Ebay ($18 billion) and Facebook ($10.5 billion
dollars). Alibaba's impressive growth means its IPO could
perform as well or better than those that I listed above.
I fully believe that any investor able to buy stock during
Alibaba's IPO this year should absolutely do so. But
getting in on the ground floor of an IPO is notoriously
hard. The good news is that even if you are unable to
directly take advantage of this IPO, there is another way to make
money off of this situation.
But you don't need to wait for the upcoming IPO to buy shares
That's because Yahoo owns a 24% stake of Alibaba. Based
on recent estimates, that equity ownership is currently is valued
at around $36 billion.
It's important to realize that Yahoo's current market
capitalization is $39 billion. That means that 92% of Yahoo's
value is tied to its stake in Alibaba.
It only stands to reason that a successful Alibaba IPO would
cause a jump in Yahoo's share price. Yahoo plans to sell some of
its Alibaba stock in the IPO. The proceeds from the IPO could be
used to fuel Yahoo's growth, buy back stock, or issue a special
If you believe that Alibaba shares could soar after the IPO,
than consider buying Yahoo stock today. By owning Yahoo shares,
you can easily own a stake in Alibaba before the company's
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