SHANGHAI — Saturday marks the one-year anniversary of Alibaba’s historic public offering. Priced at $25 billion, the largest listing ever seen on Wall Street triggered a rush of frenzied investment last Sept. 19. Analysts predicted the Chinese e-giant was on course to overtake Wal-Mart Stores Inc. — a dream of founder, Jack Ma’s.
Despite promising tailwinds, the last 12 months have been characterized by controversy for the company. Its shares are trading for less than they were a year ago, closing at $65.96 on Friday, down from the IPO price of $68 a share. Meanwhile, fraud investigations continue to rumble on, giving pause to increasingly concerned investors.
Here, WWD looks back at the key moments from a turbulent year.
On the first day of trading last year, Alibaba’s investors received a generous 38.1 percent gain, which translated into a market capitalization of $231.44 billion — only slightly lower than Wal-Mart’s capitalization.
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The rising momentum carried into November and Singles’ Day — an annual Chinese lovers’ festival when retail figures spike. Alibaba clocked up $9.3 billion in sales, nearly double its 2013 figure. The flying start was born out by its first financial filing since going public. The number of monthly active users of Alibaba’s mobile apps, led by Taobao, had expanded to 217 million by the end of September, an increase of 138.5 percent year-on-year, driven by a surge in mobile adoption among its consumers.
Ma stated that the company was getting “closer and closer” to surpassing Wal-Mart in terms of sales revenue. Less than two months after going public, Alibaba’s share price had surged by almost 30 percent, to its peak of $119.15.
But in the New Year, fortunes would turn. In January, the Chinese government accused Alibaba of failing to crack down on shady merchants, counterfeit goods, bribery and misleading promotions across its online sub-site, Tmall.com. A scathing report by the Chinese State Administration for Industry and Commerce said Alibaba faced the biggest ”credibility crisis” since its establishment.
“For a long time, Alibaba hasn’t paid enough attention to the illegal operations on its platforms, and hasn’t effectively addressed the issues,” it said.
In response, Alibaba acknowledged the problems while promising to improve monitoring efforts and increase communication with regulators. In a separate probe, the U.S. Securities and Exchange Commission raised questions over its business practices, relating to a meeting the company had with a Chinese regulator weeks prior to its IPO.
Amid the turmoil, Ma addressed China’s securities regulator in humble tones. “We are big, but not strong,” he said , adding, “Other people have very high expectations for us, and we lack a clear understanding of ourselves, as well.”
Despite doubt cast over the company’s practices, its second quarterly report card since the IPO showed sales growth that outpaced global rivals Amazon.com and eBay. Weeks later, in March, Ma was named second on Forbes ’ 29th annual World’s Billionaires List, with an estimated $22.7 billion net worth.
In May, Alibaba named a new chief executive officer, Daniel Zhang, and company sales climbed despite ongoing scrutiny from regulators in China, with U.S. revenues for the period increasing 45 percent to $2.81 billion. Zhang said key strategic accomplishments for fiscal 2015 were the “significant expansion” of Alibaba’s ecosystem. However, celebrations were cut short when a lawsuit was filed in Manhattan federal court by Gucci, Yves Saint Laurent and other brands owned by Paris-based Kering SA seeking damages and an injunction for alleged violations of trademark and racketeering laws.
Earlier this month, Alibaba’s share price tumbled by 3 percent to $62.52 after a negative article in Barron’s magazine suggested the stock could fall another 50 percent. The story suggested that China’s weakening economy and increasing competition from online retailers, plus more market scrutiny, would bring it down. Although Alibaba was quick to issue a point-by-point rebuttal of the story, continued skepticism over the company’s business model has cast a shadow over its future prospects.