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Tuesday, September 9, 2014

Jack Ma, 'capital-lite' model impress at Alibaba's Boston IPO event, (NASDAQ: FB), (NASDAQ: GOOG)

Alibaba Group Holding Ltd has two major things going for it as it prepares for an initial public offering that could raise more than $21 billion: founder Jack Ma and a "capital-lite" business model. While corporate governance remains a concern, several fund managers and analysts said Ma gave an impressive performance during the company's pitch in Boston on Tuesday for what stands to be the largest-ever U.S. technology IPO. They also said the Chinese e-commerce company's business model features strong cash-flow generation and low capital intensity similar to U.S. Internet stars Facebook Inc and Google Inc."He's executed well," said Will Danoff, who runs the $111 billion Contrafund for Fidelity Investments.Danoff declined to say whether he will invest in Alibaba. But Alibaba has some characteristics of companies that have produced home runs for Danoff's fund. He favors companies tied to the Internet, especially ones operating profitable business models with low capital intensity that enable strong free-cash generation."There's a lot of big numbers in there," Danoff said after the Boston event, pointing to Alibaba's thick prospectus.

Facebook, Inc. (Facebook), is engaged in building products to create utility for users, developers, and advertisers. Shares of FB fell by 1.57% or $-1.22/share to $76.67. In the past year, the shares have traded as low as $42.43 and as high as $78.17. On average, 38120100 shares of FB exchange hands on a given day and today's volume is recorded at 28704596.

Google Inc. (Google), is a global technology company. Shares of GOOG fell by 1.48% or $-8.71/share to $581.01. In the past year, the shares have traded as low as $502.80 and as high as $604.83. On average, 1543320 shares of GOOG exchange hands on a given day and today's volume is recorded at 1274277.



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