What Should Investors Watch For With Alibaba?

Alibaba will IPO sometime later this year, and investors need to know what they're getting themselves into before they invest.

Jun 16, 2014 at 5:20PM

Alibaba, the Chinese e-commerce giant, is set to IPO in August of this year. Investors may not know too much about the company besides its huge size, but Motley Fool analyst Simon Erickson can provide some insight. In today's Stock of the Day, Simon notes that Alibaba owns two sites: Taobao, which is a lot like eBay and includes plenty of smaller merchants, and Tmall, which has larger branded merchandise. According to Alibaba, Taobao did about $177 billion in transactional revenue last year, while Tmall did $70 million. For comparison's sake, Amazon made $100 billion last year altogether.

Clearly, Alibaba is going to be an epic IPO, but investors need to dig deeper. For instance, it's important to note that Tmall's transaction revenue was up over 90% year over year, indicating that China's middle class will keep demanding popular branded merchandise. Meanwhile, mobile transaction revenue made up about 11% of the company's total revenue last year, but was up to 27% this year, indicating increased mobile usage. Both trends benefit Alibaba, but of course Alibaba hasn't hit the market just yet. So how can investors take advantage of this now?

Yahoo! owns about 22% of Alibaba, and the company will cash that in when Alibaba goes public, bringing big bucks to Yahoo!'s bank account. More important, Simon thinks that e-commerce is a winner-take-all industry, and with roughly $20 billion coming to Alibaba once it IPOs, the company will be stronger than ever. While he wouldn't say that investors should jump in on day one, they should absolutely be keeping a close eye on this company.

Are you ready for this $14.4 trillion revolution?
Have you ever dreamed of traveling back in time and telling your younger self to invest in Apple? Or to load up on Amazon.com at its IPO, and then just keep holding? We haven't mastered time travel, but there is a way to get out ahead of the next big thing. The secret is to find a small-cap "pure-play" and then watch as the industry -- and your company -- enjoy those same explosive returns. Our team of equity analysts has identified one stock that's ready for stunning profits with the growth of a $14.4 TRILLION industry. You can't travel back in time, but you can set up your future. Click here for the whole story in our eye-opening report.

Matt Trogdon has no position in any stocks mentioned. Simon Erickson has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Amazon.com and Yahoo!. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information