Rising in Alibaba's Wake

 | Jun 11, 2014 | 3:32 PM EDT  | Comments
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Stock quotes in this article:

yhoo

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jd

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ebay

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amzn

The whole market has been going up for the last three weeks and recent initial public offering JD.com (JD) is no exception. The so-called Amazon (AMZN) of China reached $29 per share this afternoon after debuting at $19 last month.

There was a lot of worry about how the new issue would perform when it came public. Those worries seem to be forgotten.

The rise of JD's stock has finally helped the stock price of Yahoo! (YHOO). The reason is people are anticipating a welcoming environment for the likely August Alibaba Group IPO. The more JD rises, the more it's likely we will see a big market cap for Alibaba.

Meanwhile, the Chinese ecommerce giant has been making big moves ahead of its IPO.

Tuesday night, Alibaba announced that it was acquiring the remainder of UCWeb that it didn't already own. Buying UCWeb is really anyone's last best chance of catching Baidu (BIDU) in search in China. Alibaba didn't reveal how much it paid for the remaining stake it didn't own, but there were rumors that it might have set a valuation for UCWeb at $5 billion, which would be quite large for a Chinese Internet acquisition.

Today, Alibaba announced the launch of its U.S. ecommerce site 11 Main. Some see this as Alibaba's way to compete directly against Amazon. Re/Code's Jason Del Rey speculated that Alibaba might be looking at buying eBay (EBAY) or craft website Etsy as a way of jumpstarting its U.S. operations.

If it buys eBay, it would be ironic since Alibaba drove the company out of China 10 years ago. But it would also be very interesting to imagine Alibaba controlling both Alipay and PayPal as a result of an acquisition. Etsy certainly is very much in the anti-Amazon camp, so it would seem to be a natural ally for Alibaba as it comes into the U.S.

One thing is clear: Alibaba is not standing still, and certainly not in anything close to a "quiet period" when you look how active it has been rolling out new products and acquisitions almost every day.

This is partly driven by a competitive response to how strong Ten cent's WeChat is doing in China. But paranoia is better than complacency. Alibaba will surely face a welcoming institutional-investor environment when it finally holds its IPO. My best guess for an IPO date is Friday, Aug. 8 -- eight is considered a lucky number by the Chinese and that date marks the anniversary of the 2008 Beijing Olympics.

When Alibaba debuts in the U.S. -- or even as it draws closer -- watch for a corresponding rise in Yahoo!'s stock price.

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