The 10 top-searched stocks of 2014: Alibaba is No. 3
2014 may go down in history as the year that Americans discovered the world’s biggest internet company and fell in love with its profit margins and monopoly over e-commerce in China. Alibaba was the third most-searched stock on Yahoo.com, and no wonder, after it posted the biggest IPO the world has ever seen.
We should note up front that Yahoo is a major investor, with a roughly 16% stake in the company.
“All of a sudden, a lot of Americans awoke to the fact that there was this gigantic Chinese internet company that’s bigger than Amazon (AMZN), EBay (EBAY) and PayPal combined,” said Yahoo Finance Editor-in-Chief Aaron Task.
“They have a remarkable business in China. You know, that’s real business, that’s not prospective business like some tech darlings,” points out Rick Newman.
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But it’s not all roses for Alibaba. Many people don’t know what to make of the company. It’s business model is based almost entirely abroad in a market that remains, in many ways, mysterious and closed off to a large portion of the West.
“People are going to have to take some time to figure out exactly what this company is,” said Yahoo Finance Senior Columnist Michael Santoli. “I do think it’s an almost instant mega-cap. People are gonna almost have to own it at some point, but right now the learning curve is still pretty steep.”
Santoli points out that Alibaba’s IPO looked for a long time like it was the peak of the 2014 market. Stocks plummeted through October following the company’s debut, leading some to wonder if investors were piling money into Alibaba at the expense of the broader market. That turned out not to be the case.
But if you are thinking of investing in Alibaba, there are some caveats to keep in mind, as Jeff Macke points out. “Obviously Alibaba’s margins don’t resemble that of any other retail company on earth, largely because other retailers don’t get to operate within kind of quasi semi monopolistic states,” he said, referring to Alibaba’s control of e-commerce in China.
It’s more than just the company itself, even Alibaba’s charismatic leader can seem suspicious to someone critical of China’s capitalist agenda. “Jack Ma looks like he’s not just out of central casting, but was in fact made in some Chinese factory to come up with someone to endear himself to Americans,” he said. Ma was originally an English teacher who founded Alibaba in his apartment and is now one of the richest men in the world – a classic “American” style success story, if you will.
Analysts are overwhelmingly optimistic about this stock. Share prices have jumped about 15% since its landmark IPO.
More of the top-searched stocks of 2014: