Alibaba (NYSE: BABA) Stock Price Dips 4% Today; What to Expect Now

The Alibaba Group Holding Ltd. (NYSE: BABA) stock price closed at $89.89 today (Monday), the stock's second full day of trading on the New York Stock Exchange. That was a drop of 4.2% from Friday's closing price.

BABA stock opened the day at $92.64, and dipped as low as $89.50 around 12 p.m. From there, BABA shares hovered around $90 for much of the afternoon.

baba stock priceIt was announced today that the Alibaba IPO was officially the largest initial public offering in history, after the deal's underwriters exercised an option to increase the deal by 15%. Through a process known as a "greenshoe option," Alibaba's underwriters purchased an additional 48 million shares at the $68 offer price.

The greenshoe option brought the Alibaba IPO price total to a whopping $25 billion. That easily outpaced the $22.1 billion the Agricultural Bank of China Ltd. raised in its 2010 IPO.

On Friday, Alibaba shares opened trading at $92.70 - a 36% increase from the stock's offer price of $68. BABA shares closed their first day of trading up slightly to $93.89.

According to Bloomberg, that was the largest first-day pop for a company holding an IPO of at least $10 billion.

Trading volume for BABA stock was still high on the day, reaching 66 million. On BABA's first day on the market, more than 271 million shares exchanged hands.

At today's price, Alibaba has a market value of roughly $221 billion. That's a figure that analysts have been watching very closely throughout the Alibaba IPO process, because the Chinese e-commerce firm has already reached a higher market cap than many established U.S. tech companies.

Currently, Facebook Inc. (Nasdaq: FB) is valued at $200 billion, while e-commerce competitors Amazon.com Inc. (Nasdaq: AMZN) and eBay Inc. (Nasdaq: EBAY) have market caps of just $153 billion and $65 billion, respectively.

That's also a figure that Alibaba's Founder Jack Ma seems to be following closely.

"We want to be bigger than Wal-Mart," Ma said last week. "We hope in 15 years people will say this is a company like Microsoft, IBM, Wal-Mart; they changed, shaped the world."

Wal-Mart Stores Inc.'s (NYSE: WMT) $246 billion market cap is currently within reach for Alibaba.

The BABA stock price may have dipped 4% today, but investors should not be concerned. As Money Morning's experts have pointed out for months, BABA stock is an excellent long-term investment.

In fact, it's the type of rare profit opportunity that Money Morning's Executive Editor Bill Patalon says "only comes around once or twice in an investor's life."

Where the Alibaba (NYSE: BABA) Stock Price Is Headed

"I think with the Alibaba stock price, the issue isn't what it will do in the short term, I think it's what it will do over the long haul," Patalon said. "I think Alibaba has the potential to become a trillion-dollar company. When the stock debuted on Friday, you were looking at a value of more than $220 billion. For the stock to reach my target it's going to have to go up nearly five-fold. That's a huge return. You just don't find those every day."

The biggest reason Money Morning experts are so bullish on the BABA stock price is the explosive growth the Chinese market is experiencing...

"The number of Internet users in China is now greater than 632 million people, roughly twice the entire U.S. population, according to the China Internet Network Information Centre (CNNIC)," Money Morning's Chief Investment Strategist Keith Fitz-Gerald said. "It will hit 800 million by 2016 or sooner."

In 2013, roughly 80% of all transactions that took place in China took place over one of Alibaba's sites. Any growth the industry sees will have a direct impact on Alibaba.

And it isn't just the traditional Internet user base in China that's growing. Globally, the use of smartphones, tablets, and other mobile devices is soaring.

"More than 4.6 billion people worldwide will use a smartphone this year, according to E-Marketer, and that number will rise to 5.1 billion by 2017, or roughly 70% of the world's population," Fitz-Gerald said. "Most are going to be using e-commerce for the very first time."

"The Alibaba IPO really represents the future of the Internet as we know it," Fitz-Gerald continued. "Already bigger than Amazon.com Inc. (Nasdaq: AMZN) and eBay Inc. (Nasdaq: EBAY) combined, Alibaba's IPO is really about who will control the Internet's core markets and payment mechanisms - two areas that U.S. investors have traditionally held sacrosanct."

"It's not just the Internet company of China, it's the Internet company of the world."

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