Alibaba's Big Day Brings IPO Excitement, No Guarantees

The Chinese e-commerce giant's IPO has raised plenty of questions over whether investors can make money.
Posted at 8:17 AM, Sep 19, 2014

It's Alibaba and executive chairman Jack Ma's big day — when the Chinese e-commerce company starts trading on the New York Stock Exchange. 

You've already heard the staggering numbers — at $68 per share analysts keep pointing out it could be the biggest initial public offering ever. 

Still — as enticing as Alibaba might be to a professional investor, there are some risks. First — Chinese law bans certain kinds of foreign investment, so:

BLOOMBERG: "You're buying shares of Alibaba through a contract rather than direct ownership. Which gives the Chinese government the ability to essentially revoke their license."

That's how many Chinese companies traded outside of China work. In the investment world — it's called a variable interest entity.  (Video via Euronews)

And while his rags-to-riches story has made him something of a media darling, critics say Jack Ma will be hard to control. (Video via Stanford Graduate School of Business)

The New York Times points to the time he spun out Alibaba's third-party online payment business — and the time he allowed the company to loan one of its founders $1 billion. 

But for all the concerns, there's a lot of allure for a would-be investor. 

Consider this: 88 percent of Americans have never heard of the company. That's a whole bunch of unexposed, potentially new customers when Alibaba further expands a U.S. version. (Video via France 24

So, if you're an optimist, a lot of room for growth there. And — considering the low cost of operations, Alibaba has shown pretty impressive profit margins.

This video includes images from Getty Images.