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Alibaba Chooses the New York Stock Exchange

Jul 24, 2014

When the Chinese internet retail giant Alibaba enters the public U.S. stock market later this year, they plan to use the stock ticker name BABA. The word ‘ba’ means 8 in Chinese, and using 8 twice -- BABA -- coincides with their requested first day of trading, 8/8 (subsequently pushed back to September). While there's no historic evidence that proves such symbolism is a guarantee for a successful IPO, the investing public's emotional support, enthusiasm and confidence are clearly at play on the days leading up to and following a company's entry to the market.    

The technology boom of the 1990s had a similar enthusiasm, with investors gossiping and lining up for the NASDAQ’s latest tech offerings. But along with the fanfare and exponential growth, there was also a higher degree of risk looming below the surface. When the public technology market collapsed in 2000, NASDAQ had the vast majority of tech companies while the NYSE had more of the larger, more stable companies. On Jan 14, 2000, the NYSE was at 6870 and it closed for the year at 6785, which is very little change when compared to the NASDAQ, which had declined by more than half during the same period.  

As we approach the 15-year anniversary of what we now refer to as "the technology bubble," it appears that the NASDAQ has lost its ‘swagger’ with technology companies, especially those entering the public market. In line with recent trends, Alibaba Group has chosen the New York Stock Exchange for its upcoming IPO.  As such, Alibaba would be the third largest tech company listed with the NYSE.

While there has been continued talk that market might be in for a "correction" someday soon, the NYSE might still be perceived as providing a more stable market with more promising returns. Alibaba's decision regarding what date to launch their IPO may be based upon symbolism, but their decision where to list their IPO seems to be based on history, reputation and changing trends. 

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Marc Fogarty

Marc Fogarty, Audit Partner within Technology and Life Sciences Group, and member of the firm's Public Companies, Cleantech and International Services Groups. Marc is experienced in public accounting, serving public and private organizations and has presented on IFRS to professional groups.

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