One of the biggest IPO’s of 2014 is going to be Alibaba and it might be taking place within the next three months. That is surely going to put added pressure on Amazon’s stock which is already reeling, having gone down about 28% in three short months. In recent days/weeks/months, investors appear to becoming extremely weary of Amazon’s never ending spending without meaningful profits to show strategy. Now Alibaba is coming into the picture and it squarely has Amazon in its cross hairs.
When all is said and done, Alibaba could be worth between 200 and 250 billion dollars after the IPO. Alibaba does most everything that Amazon, Ebay, and Paypal does and it is all rolled into one company. If American consumers haven’t heard the “Alibaba” name yet, they will shortly as this IPO will easily get as much attention as the Facebook IPO. There will be news stories about this public offering in all media outlets and interest is going to be peaked with both women and men.
Anything Amazon Can Do Alibaba Can Do Better?
One thing that Amazon is heavily involved with is its Amazon Prime streaming service. They tie the service into reduced shipping charges and the combination of services is proving to be a worthy competitor to Netflix. But not to be outdone, Alibaba has gone out and bought a stake in Youku Tudou which is a Chinese media company. This should give Alibaba options to compete on the video streaming front and shows that it will be branching out from just being a selling portal. A company of this size has the ability to buy its way into new markets and ultimately create meaningful competition down the line.
Amazon’s whole premise of reinvesting money back into the business has been to grow and expand as fast as it can. Sacrifice any profits now to create an infrastructure that is impossible to compete with years from now. Investors have, up until 3 months ago, been willing to buy into grand vision by driving the stock price up.
But uncertainty has crept into investors minds as of late and this forthcoming Alibaba IPO certainly won’t help alleviate their fears. Up until now, Amazon has had a mostly dominant selling platform as their competition has been able to make few inroads. Now though, we have a real threat in Alibaba that has already proven itself in China and is looking to expand here in America. This has to be a worry to Amazon stock holders and should put a new kind of pressure on the stock in months to come.