How Alibaba stacks up against tech’s top players

Alibaba’s long-awaited IPO is here. Alibaba, which handles more business than any other e-commerce company, is set to sell about US$22 billion of shares on Thursday after the close of trading. This makes it the biggest public offering in U.S. history. It will trade on the New York Stock Exchange under the ticker “BABA.” Alibaba, which handles more transactions than Amazon.com and eBay combined, is expected to price within the $66 to $68 per American depository share range, according to CNBC. Alibaba’s sites moved a whopping $248 billion in merchandise last year, but it does not actually inventory or sell goods. It operates only as a middleman, collecting annual fees and commissions from larger merchants and advertising fees from small businesses that want to stand out. As a result, its profits are enormous.

Short of a major acquisition, it would take years for any business, let alone Alibaba, to come into the U.S. and compete with Amazon and eBay today.

Kelland Willis, Forrester analyst

The company earned $2.9 billion on revenue of $6.5 billion for the last nine months of 2013. That’s a net profit margin of 45 percent—far higher than America’s highest performing technology companies, including Microsoft, Apple, Google and Facebook. Of course, Apple leads the charge among tech giants with a nearly $608 billion market value. Interestingly, Apple’s massive $165 billion cash pile alone is almost as big as Alibaba. The other S&P tech companies with a higher valuation would be Microsoft, Oracle, Google and IBM.

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