Chris Styles

I sat in a hotel room in Kuala Lumpur the night before a UNSW graduation ceremony and watched the lPO of Jack Ma’s Alibaba. Sitting in the shadow of the extraordinary Petronas Towers, it was strangely gripping TV.

Ma was interviewed on CNBC and was treated like a rock star. In his interview he repeated his mantra – customers are #1, employees are # 2 and shareholders are #3. But he still wants to make sure shareholders (or those soon to be shareholders) make money.

While at that point he didn’t have investors’ money, he said what he did have was trust. That seemed to be his key selling point for the company. One of the interviewers said he was feeling particularly uncynical about the whole thing. Ma has a vision to empower entrepreneurs through his e-commerce website and be the champion of small and medium-sized business in China.

“We want to be bigger than Walmart,” Ma says. He wants people to say that Alibaba is like Microsoft and Walmart – it changed the world.

Before the bell, the price was set at US$68. At that price this IPO should raise almost the total amount raised in IPOs so far this year. The scale – like all things in China – is immense. It will be the biggest IPO ever.

Masayoshi Son, CEO of SoftBank, biggest shareholder of Alibaba and now Japan’s richest man, followed Ma on TV and sang his praises. According to Son, money is not the goal, it’s about passion and vision. And Ma has both. Politics is not an issue. One is from China, the other from Japan.

When the stock went on the market, there was no indication of a selling price. There were hundreds of thousands of orders but no sellers. Indications were that the first sellers would come to market at around US$84-US$87.
Could this be the perfect IPO? Even with the uncertainties that come with the China market?

The stock finished the day at US$93, valuing the company at US$230 billion. More than Facebook.

In the heart of capitalism – the New York Stock Exchange – China could once again be changing the (economic) world order. Along with the Petronas Towers out my window, it is another reminder of the shifting centre of gravity to Asia.

The ticker for the company is BABA. “Ba” means 8 in Mandarin – a lucky number in Chinese culture. Ma and a bunch of investors got very lucky. Perhaps so too did global capitalism.

Let’s see if the luck holds.

Chris Styles is a professor of marketing and dean of UNSW Business School.