Alibaba Group Holding Ltd (BABA) Not Nearly As Oversubscribed as Other Hot Stocks

Alibaba Group Holding Ltd (NYSE:BABA) may not have the major pop in it on day one that many analysts have predicted. The stock does not have nearly the bulk of orders on it that other hot stocks have had ahead of their IPO’s, and that could signal only modest gains on IPO day. Speaking to Fox Business News, Chapwood Investments’ Ed Butowsky discussed his expectations for Alibaba Group Holding Ltd (NYSE:BABA) after the bell rings.

“Well, it’s going to be all over the place. What I know is it’s three times oversubscribed, which means there are three times more orders than the number of shares that are going to be sold. Now that sounds really good, but a real hot offering is going to be about five to ten times oversubscribed. Most of the offers that have come in are from institutional investors. This is not a hot offering.I don’t expect it to do poorly at all, but I also think it maybe is going to go up about one or two points after the opening, and will probably get priced around $70,” Butowsky said.

That call is in contrast to the calls of several other analysts, who have predicted a day one pop for Alibaba Group Holding Ltd (NYSE:BABA) of between 10% to 15%. New reports even having the stock doing much better than that, closing as high as $100, which would be a 40% gain from the IPO offering price.

The seeming lack of interest outside of institutional investors is likely a result of Alibaba Group Holding Ltd (NYSE:BABA) being a largely unknown commodity in the U.S. That could be leaving many investors with cold feet or simply disinterest in the stock at the moment, until they feel more comfortable with it.

Alibaba Group Holding Ltd (NYSE:BABA) trading has just begun on the New York Stock Exchange, and it has leapt to just under $100 within minutes of trading.