An Analysis of Factors Affecting IPO Performance Based on Alibaba IPO

Abstract

In this dynamic era of technological innovation and information flow, an increasing number of internet companies and e-commerce platforms emerge in endlessly. The level of capital injection is a crucial consideration for companies who desire to expand or innovate, especially for internet companies during the period of rapid development. As a result, going public will be a plausible solution for firms as they are not only able to get sufficient financial support, but also to gain competitiveness. However, companies always need to make some choices when going public: Which and how many underwriters do they need? Which stock exchange do they want to be listed? How should shares issued by a company be priced? Companies need to develop a far-sighted mind to look at this event, along with an innovation strategy that enable businesses to gain a firm foothold in the international market. This paper explains the factors that companies have to take into account in their IPO processes. The IPO event of Alibaba, which shows double-edged effects, is discussed in detail.