ConvergEx Group Survey Supports Decision to Increase Alibaba IPO Price Range

NEW YORK, Sept. 15, 2014 /PRNewswire/ -- ConvergEx Group, a leading provider of global brokerage and trading-related services, has released selected results of its Alibaba IPO Roadshow Survey, exploring how Alibaba's presentation to potential buyers (the "roadshow") has affected financial industry sentiment about the company's forthcoming initial public offering (IPO).  The survey was conducted from September 9 to September 11, 2014.  ConvergEx initially recorded industry views on Alibaba in a survey conducted in July.

A majority (54%) of survey respondents said they anticipated the final price of the Alibaba IPO to be above the previously announced price range expectation of $60 to $66 per share.  This result is consistent with reports that Alibaba now plans to increase the top end of the range to approximately $70.

As a result, financial industry participants have lowered their expectations for the stock's appreciation potential. Before the roadshow, 52% of respondents expected Alibaba shares to appreciate 10% or more in the first month of trading; that number falls to 33% in the current survey. Originally, just 12% expected the stock to depreciate in its initial month; now 22% believe a decline will take place.

More than two-thirds (67%) of respondents were familiar with the roadshow materials and more than 90% said that the content had not changed their minds on whether to invest. However, 49% now said they planned to buy Alibaba shares; that number was 43% in July.

"These are very positive numbers, particularly for an IPO of record-breaking size," said Nicholas Colas, ConvergEx Group chief market strategist. "The roadshow did what it was supposed to do, as our survey shows a remarkable level of enthusiasm among financial professionals for this offering. But a higher-than-anticipated price has also reduced expectations for appreciation over the first month of trading."

Additional survey results are being made available exclusively to ConvergEx Group clients.

For more information on the Alibaba IPO Roadshow Survey, click here.

For the original July Alibaba IPO Survey, click here.

Roadshow Response
Did the Alibaba roadshow and/or the preliminary prospectus change your decision on whether or not to buy shares? Key Findings:

• Yes, decided to buy – 6%
• Yes, decided not to buy – 2%
• No, still plan to buy – 31%
• No, still plan not to buy – 30%

Deal or No Deal?
Compared with July, more respondents are planning to buy Alibaba shares, but a majority still plan not to buy. Key findings:

• Do not plan to buy shares – 51% (57% in July)
• Plan to buy after the IPO – 24% (25% in July)
• Plan to buy at the IPO – 15% (11% in July)
• Plan to buy both at and after IPO – 10% (7% in July)

Range Reaction
A majority expects a higher final IPO price than the announced range of $60-$66 per share. Key findings:

• Below $60 – 5%
• $60-$66 – 41%
• Above $66 – 54%

Depreciating Appreciation
Compared with July, respondents expect lower levels of appreciation in Alibaba stock in the first month of trading. Key findings:

• Expecting appreciation – Total 78% (88% in July)
  • Will appreciate up to 10% – 45% (36% in July)
  • Will appreciate between 10% and 20% – 26% (33% in July)
  • Will appreciate 20% or more – 7% (19% in July)
• Expecting depreciation – 22% (12% in July)

Methodology
The ConvergEx Group Alibaba IPO Roadshow Survey was performed by ConvergEx via an online survey of financial industry participants, resulting in 240 respondents. The survey was conducted from September 9 to September 11, 2014, and has a margin of error of + 10%. Respondents included buy-side firms (asset managers, hedge funds), sell-side firms (banks, broker-dealers), trading venues, service providers and other financial industry participants.

About ConvergEx Group
ConvergEx Group is a leading provider of global brokerage and trading-related services. Its companies provide products and services in the following areas: global execution and clearing, commission management, independent research, commission recapture, options technologies, prime services and outsourced connectivity. ConvergEx Group companies do not engage in market making or investment banking, but may operate in a riskless principal and/or net trading capacity as well as in an agency capacity. In connection with certain ETF transactions requested by clients, ConvergEx Execution Solutions may act as a principal or engage in hedging strategies in connection with such transactions.

In the U.S., ConvergEx Group is comprised of ConvergEx Execution Solutions LLC (member NYSE/FINRA/SIPC), of which ConvergEx Prime Services is a division; LiquidPoint, LLC (member CBOE/SIPC); G-Trade Services LLC (member FINRA/SIPC); Westminster Research Associates LLC (member FINRA/SIPC); and ConvergEx Solutions LLC, of which ConnEx, Jaywalk and LDB are divisions. ConvergEx Group, LLC is a subsidiary of ConvergEx Holdings, LLC. Additional information is available at www.convergex.com.

Contact:
Michael Kingsley
[email protected] 
212.468.7713

Logo - http://photos.prnewswire.com/prnh/20140730/130987

SOURCE ConvergEx Group