Alibaba Group Holding Ltd. fell at the begining of trading Wednesday, the very first time many of the earliest investors in the Chinese company were able to sell shares.
Today marks no more a six-month lock-up period for about 14% of the company\’s publicly owned stock. Lock-up agreements exist to keep share prices stable in the months following an initial public offering by preventing employees and pre-IPO investors from dumping the stock.
Wednesday\’s losses have contributed to a 30% slump from the November high badly news piled-up. A Chinese regulator accused the organization of peddling knock-offs, Taiwan ordered Alibaba.com to depart over alleged investment violations, and Alibaba\’s latest quarterly revenue fell below expectations amid a decelerating Chinese economy and competition.
\”People who bought Alibaba pre-IPO is going to be happy to escape now,\” said Josef Schuster, the founding father of IPOX Schuster LLC in Chicago. \”It\’s still way above the IPO price and doesn\’t look cheap here.\”
The stock was down 1% to US$83.63 by 11:01 a.m. in New York. At that price, the shares are still up 23% since their debut.
Even following the recent decline, Alibaba still fetches reasonably limited to other Internet companies — trading at approximately 17 times projected sales for 2015. Chinese competitor Tencent Holdings Ltd. trades closer to 11 times expected sales, EBay Inc. reaches 3.7 times estimated revenue with this year.