Alibaba Group Holding's shares soared 38% in their first day of trading on Friday as investors jumped at the chance for a piece of what is likely to rank as the largest IPO in history.
It was an auspicious debut for the Chinese e-commerce company, which was founded by Jack Ma in his apartment in 1999 and now accounts for 80% of online sales in China.
The stock opened at $92.70 and quickly rose to a high of $99.70, before paring gains to close at $93.89.
Some 271 million shares changed hands, more than double the turnover on Twitter's first day last year, although still short of volume for the General Motors and Facebook IPOs.
The pricing of the IPO on Thursday initially raised $21.8 billion for Alibaba. Scott Cutler, head of the New York Stock Exchange's global listing business, said that underwriters would exercise their option for an additional 48 million shares ,to bring the IPO's size to about $25 billion, making it the largest initial public offering in history.
But a source close to the matter said the underwriters would make a final decision on whether to exercise the option over the next week or two, based on how the shares trade over the next few sessions.
Alibaba is nearly unknown to most Americans but is ubiquitous in China. The company, which operates China's largest Internet shopping destination, Taobao, and retail site Tmall.com, earned $3.7 billion in the 12 months to the end of March, up about $2 billion from the prior 12-month period.
At its closing share price on Friday night, Alibaba has a market value of $231 billion, exceeding the combined market capitalisations of Amazon and eBay, the two leading US e-commerce companies.
Alibaba is valued at 39 times its estimated earnings per share for its current fiscal year, which ends in March.
That is right in line with Facebook's valuation of 39 times forward earnings but nowhere near the lofty valuation of Amazon.com's multiple of 264, according to Thomson Reuters Starmine data.
