ALIBABA Group Holding Ltd.’s initial public offering (IPO) now ranks as the world’s biggest in history at US$25 billion, after the e-commerce giant and some of its shareholders sold additional shares.

    Overwhelming demand saw the IPO initially raise US$21.8 billion and then send Alibaba’s stock surging 38 percent in its debut Friday. That prompted underwriters to exercise an option to sell an additional 48 million shares, a source with direct knowledge of the deal said yesterday.

    The IPO surpassed the previous global record set by Agricultural Bank of China Ltd. in 2010 when the bank raised US$22.1 billion.

    Under the option, Alibaba agreed to sell 26.1 million additional shares and Yahoo Inc., 18.3 million, netting the two firms an extra US$1.8 billion and US$1.2 billion respectively.

    Alibaba founder Jack Ma agreed to sell an extra 2.7 million shares and company co-founder Joseph Tsai agreed to sell 902,782 additional shares, according to the prospectus.

    The source declined to be identified as the details of the additional sale have yet to be made official. Alibaba declined to comment.

    Alibaba shares Friday rose to US$93.89 after being priced at US$68, the high end of its targeted range. The rally compared with the average 19 percent first-day gain for Chinese IPOs in the United States over the past decade. While Alibaba’s advance was better than most of its peers, it still fell short of Baidu Inc.’s almost fivefold one-day surge when China’s largest search engine listed on the NASDAQ Stock Market in 2005.

    Alibaba’s market capitalization was US$231 billion as of Sept. 19, surpassing that of Facebook Inc., the world’s largest social network, and trailing only Google Inc., Apple Inc. and Microsoft Corp. in size among U.S.-traded technology firms.

    While the first-day performance and record dollar amount made Alibaba a standout among IPOs this year, it still faces the challenge of adjusting to being a publicly traded company, said Walter Todd, who oversees about US$1 billion as chief investment officer for Greenwood, South Carolina-based Greenwood Capital Associates.

    “That can be a risky process,” Todd said. “The real question would be after the IPO, how does it perform going forward? They need to deal with investors, manage earnings calls, which requires experience to get there.” (SD-Agencies)