Alibaba Group Holding Ltd (NYSE:BABA) Heightens Suspense With Announced Lockup

Alibaba Group Holding Ltd (NYSE:BABA) knows how to do it big. Last year the company sent tongues wagging, and curiosity heightened, with its first public offering in September. Such was its magnitude that the initial offering was $125 billion. Come March 18, the company will be at it again. The company recently announced that a few of its huge investors, as well as company insiders, will be free to sell shares. A total of 429 million additional shares an increase of 61 million shares up from 368 million shares. Even more phenomenal is that the company has substantially grown since its initial share offering. This amount will represent 16% of the company’s outstanding shares.

Do analyst foresee a momentum shift in BABA?

This news comes on the back of the company announcing that it has had some problems recently. Noting that Chinese agency; the Securities and Exchange Commission, criticized it for not doing enough to stop unscrupulous activities. These activities come in the form of counterfeiters and fraudulent Web storefronts active on its shopping platform. A claim since toned down by the Chinese agency. However, it did do some damage as quarterly profits for that period rose by 40%. Additionally, analysts have said that they do expect at least minimal impact from the Chinese agency’s claim.

Despite the storm clouds that was surrounding the company. Alibaba announced the opening of a data center in the US. While the company did not disclose the location of the center, many said this move meant the company was entering the US market.

There may be some drawback to the overbearing lockup expiration though. It is feared that the impending expiration may strain Alibaba’s stocks. Some positive news, however, relates to the company’s largest IPO stakeholders not being involved in the selloff this time around, hence there may not be much arm in the selloff.

John Eisler

John Eisler

John is a special projects and general assignment reporter, noted for breaking several exclusive stories.