Alibaba's Hong Kong stock market listing was a huge success. They were able to raise 1 billion EUR and are the second most successful Internet stock IPO in the world. Number one is still Google.

While this is first of all a current fact, opinions on Alibaba's stock market debut are as far apart and extreme as the success of this listing. At its current valuation the company has a 320 price-to-earnings ratio, which is nearly double that of other Nasdaq-listed Chinese Internet companies such as Baidu.com (177). Alibaba's pitch sounds something like this, though. Chief Executive David Wei: "Our core customers are the 42 million small-to-medium enterprises in China that are growing very fast."

The WSJ points out one other issue: "Alibaba has also become susceptible to sellers listing counterfeit, gray-market, tainted or unsafe products -- a problem that could damage the company's image and become a source of legal troubles as it has for other online-trading platforms, including eBay, Inc. The company says it has cooperated with brand owners to delist products that violate their rights."

The Chinese, even more than average American, like gambling. Alibaba is certainly such a gamble, but the odds could still be higher though than betting your money in a casino.

I am BTW still trying to find out where the name came from. Ali Baba is of course from the 1001 Arabian Nights tales, "Ali Baba and the 40 thieves" but why do they use it for a Chinese company name? "baba" means 88 in Chinese, that much I know.

If you are interested to see who else is playing in the Internet sector in China, this Blog posting (September 26, 2007) has a nice list.