Author: Aaron, Think AI
SpaceX is going public, seizing the spotlight and becoming the hottest topic in the market.
Not only will this IPO become the largest in the history of the U.S. stock market and globally.
Both the market capitalization at listing and the fundraising amount have set historical records. The valuation is set at $1.77 trillion, raising $75 billion. Each figure is stimulating public nerves.
It's also because Musk's firm stance towards investment banks and rewriting of IPO rules have pushed this IPO to its climax.
This IPO reserves 30% of the new shares for retail investors, far exceeding the U.S. IPO convention of 5-10%, breaking institutional monopolies on high-quality assets.
Moreover, Musk has pressured investment banks to lower the overall underwriting fee rate to below 0.75%, lower than the typical above 1% for large-scale IPOs, setting a new low for mega-IPO fees.
Global capital is scrambling to book quotas, betting on the space narrative, creating the most frenzied U.S. IPO market in decades. The previous record holder for the largest U.S. IPO by fundraising size was a Chinese company, Alibaba.
That was the era when Ma Yun said he couldn't find a competitor even with a telescope. In 2014, they created the largest fundraising record in U.S. stock market history, a record that stands until today, only now being broken.
How did that globally sensational IPO happen? And what has Alibaba experienced over these past ten-plus years?
The Feast Over a Decade Ago
On September 19, 2014, Alibaba officially listed on the New York Stock Exchange.
The offering price was set at the upper limit of the range, $68. On its first trading day, Alibaba opened at $92.70, a surge of about 36% from the offer price, and finally closed at $93.89. Its closing market cap reached $230 billion, surpassing Amazon and Facebook at once to become the world's fourth-largest tech company.
The originally planned fundraising was $21.76 billion. Due to the frenzy of global capital oversubscribing, the underwriters exercised the over-allotment option, ultimately raising over $25.03 billion, topping the global IPO fundraising chart at the time.
Back then, Alibaba was the combination of Taobao, Tmall, Alipay, Cainiao, Alibaba Cloud, and China's e-commerce infrastructure.
It represented a rapidly rising Chinese middle class, a continuously digitizing consumer market, and a Chinese growth story that global investors had long imagined but found hard to buy into directly.
In a sense, the 2014 Alibaba was the company closest to being the "gateway to the era" in the eyes of the capital market at that time.
Alibaba's listing made global investors realize that China could also have world-class internet platforms, entering the first tier of global tech companies, an influence that remains profound today. Simultaneously, it catalyzed the golden age of Chinese ADRs, sparking a wave of Chinese internet companies rushing to list.
In turn, it also forced the Hong Kong capital market to change.
Alibaba initially did consider Hong Kong, but its partnership structure conflicted with the Hong Kong exchange's "one share, one vote" rules at the time. Eventually, Alibaba chose to list in the U.S.
Years later, the Hong Kong exchange reformed its listing rules, allowing new economy companies with weighted voting rights to list. Companies like Xiaomi and Meituan were able to go public, and Alibaba later conducted a secondary listing in Hong Kong.
Thereafter, Alibaba's e-commerce empire entered a golden period of expansion, and in October 2020, its market capitalization peaked at $630 billion, reaching its historical zenith. During that phase, Alibaba planted a seed that wasn't the main character then, but helped Alibaba successfully transform until the AI era.
From "Pick One" to Being Surpassed by Pinduoduo in Market Cap
Just one month after Alibaba's market cap peaked, Ant Group's IPO was halted, abruptly ending the trillion-dollar valuation financial listing dream. This also marked the beginning of Alibaba's decline from its peak.
In 2021, Alibaba was fined 18.228 billion RMB for platform "Pick One" monopoly practices, setting a domestic antitrust penalty record.
The reason for the massive fine was that Alibaba, since before 2015, had abused its dominant market position by requiring merchants on its platform to exclusively open stores or participate in promotional activities on Alibaba's platform, seriously harming merchants' rights and constituting monopolistic behavior.
Subsequently, in December 2023, it was ordered to compensate JD.com 1 billion RMB, settling the decade-long "Pick One" feud.
During this period, the big-company malaise proliferated at Alibaba. Formalism and bureaucracy became rampant, with little innovation left. The sexual assault incident involving a female employee boiled over, triggering national舆论, ultimately leading to the resignation of several executives. CEO Zhang Yong publicly apologized, and Alibaba's value system was severely questioned.
Strategic misjudgments in multiple ventures during its expansion not only cost Alibaba hundreds of billions but also caused it to lose its core e-commerce moat. Alibaba bet on consumption upgrade, causing Taobao to lose its "cheap" positioning, with the market being captured by Pinduoduo. Taobao and Tmall's market share accelerated its decline from 66% in 2019 to around 30% today;
After 2016, it proposed the "New Retail" strategy, investing hundreds of billions attempting to integrate online and offline, investing in or acquiring Intime, Sun Art Retail, Suning.com, etc., all at significant losses, missing the golden period of short video and live-streaming e-commerce.
The Digital Media and Entertainment segment lost 60 billion RMB over 8 years, with its industry position continuously declining. After acquiring Youku, it fell from first place to fourth in the industry, being completely surpassed by Tencent Video and iQiyi. Xiami Music shut down in 2021. Applying technology and capital thinking to operate creative industries, it lacked content genes.
Local living services continued to be suppressed by Meituan. Then, at the end of November 2023, Pinduoduo's market cap surpassed Alibaba's for the first time. Ma Yun responded on the internal network, "Alibaba will change, Alibaba will reform," mentioning, "The AI e-commerce era has just begun."
Alibaba reached its darkest hour, and AI became Alibaba's new antidote.
AI Era Layout
Currently, Alibaba has a strong presence in the AI field. Its Tongyi Qianwen model reached a peak of 300 million monthly active users on the consumer side. Alibaba Cloud's Q1 total revenue reached 41.6 billion RMB, a year-on-year increase of 38%, with AI-related products accounting for 30% of revenue;
Alibaba Cloud has ranked first in China's public cloud IaaS market share for many consecutive years, becoming the core infrastructure for AI development in China.
It is investing in self-developed chips for AI training, and the large model is now embedded into ecosystems like Taobao, Alipay, Amap, and Feishu, accelerating commercialization. However, current challenges remain evident.
On the consumer side, it is still suppressed by ByteDance. Doubao's monthly active users far exceed Qianwen's, with higher user stickiness. After the Spring Festival activities, Qianwen's active users dropped to around 150 million.
The departure of Tongyi Qianwen's head, Lin Junyan, caused team turbulence. Competition for top AI talent is intensifying, and Alibaba's appeal is diminishing; Alibaba is wavering between AI traffic entrances (C-end users) and AI industry networks (ToB services), failing to form a clear differentiated positioning, and its technical roadmap is unstable.
Looking back at Alibaba's rise and fall over the twelve years since its listing, the fate of giants is clearly visible.
In 2014, the capital market gave Alibaba a super-high valuation, betting on the era红利 of China's consumer internet;
The subsequent years of setbacks stemmed from reckless strategic diversification driven by blind expansion, decision-making delays caused by big-company malaise, and era misjudgments from轻视 emerging sectors;
Ultimately, relying on AI for recovery proves that hardcore technology is the fundamental underpinning for tech companies to navigate through cycles.
