Investment in China PIPEs grows on Alibaba’s coattails
By Bill Meagher Updated 07:45 PM, Sep-09-2014 ET
Fueled by the anticipated initial public offering of Alibaba Group Holding Ltd., a renewed wave of investor interest has swept into U.S.-registered Chinese companies.
Such companies have raised $4.43 billion in 35 private-investment-in-public-equity transactions this year, compared to $276.8 million in 13 PIPEs last year, according to PrivateRaise, The Deal’s data service that tracks the PIPE market. Those figures exclude transactions that raised less than $1 million.
Alibaba’s imminent IPO has increased investor awareness that all things related to Internet shopping in China could be a “money-spinner,” Fuhrman said in an e-mail.
“Pretty much all the China IPOs in US this past 12 months have been internet-related. Now comes the Daddy of them all,” he wrote. “This perception of a boom of titanic proportions in online shopping in China is well-founded. The challenge for US investors is whether the companies that have gone public, with exception of Alibaba and to a lesser extent Jingdong will be able to scale up and make real money over time in China.”