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What Alibaba means for other August IPOs

July 16, 2014, 11:39 PM UTC
Alibaba Group Holdings Ltd. and Founder Jack Ma As Company Files for U.S. Initial Public Offering of E-Commerce Giant
Photo by Nelson Ching/Bloomberg—Getty Images

Chinese Internet behemoth Alibaba Group is expected to go public on August 8, owing to the traditional Chinese belief that the number 88 symbolizes good fortune. But don’t expect anyone else to try getting in on the ’88’ action.

Other companies with IPOs in the pipeline are trying to steer far clear of the Alibaba offering, even if that means pushing their own listings until after Labor Day. Some are worried that Alibaba literally will suck up too many investment dollars, given that bankers expect it to raise around half of the entire 2014 IPO volume. Others are avoiding Alibaba from a marketing perspective, since media organizations will be laser-focused on the larger offering. If a $200 million IPO with a 20% pop falls on August 8, it won’t make a sound.

For reference, think back to when Facebook (FB) went public on May 18, 2012. That also was a Friday, but not a single other company priced an IPO that week.

What should be very interesting to see, however, is what comes after 88.

There is a school of thought that many companies are waiting for Alibaba to price before making their next move. Particularly other Chinese Internet companies looking for price guidance on their own IPO or M&A aspirations. Other companies simply want Alibaba out of the way before pushing forward, but few will set up road shows for the following week — just in case Alibaba somehow doesn’t meet its mystical target.

Facebook unfortunately is not a good guide here, because that listing was so bungled by NASDAQ that the entire IPO market virtually ground to a halt (only six companies priced in the subsequent six weeks). Alibaba and NYSE have hopefully prepared well for the trading onslaught, so that Alibaba can be a domino rather than a boulder.

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